Large stands are good buys

Worldwide, the sub-division of large residential stands is gaining popularity – and presents good opportunities for property investors.

So says Harcourts Africa CEO Martin Schultheiss, who points to new figures from the UK Department for Communities and Local Government that show 25% of new British homes are now being built on subdivided existing residential land, including many “back gardens”.

“And although no hard figures are available locally, the trend is also visible in South Africa and the reasons are plain: Land is becoming scarcer and it is often cheaper and easier to build in developed areas because of existing infrastructure.

“Added to that, many well-off retirees who are downscaling are unwilling to compromise on their lifestyle and opt to look for more compact but still upmarket properties in their familiar areas, fuelling demand for small developments on large suburban stands.”

However, he points out, such development is not limited to posh suburbs. “In many cities around the country, sub-division is all the rage simply because the demand for compact units such as duets or small sectional title homes in an established setting is growing strongly. Pretoria’s Moot area springs to mind in this regard.

“What this means for investors is that there are good returns to be made on purchases of large properties that can be subdivided – provided of course that the relevant local authority is amenable to the idea and has the capacity to efficiently process the subdivision applications.”

Buyers of such properties, Schultheiss says, should bear in mind that the condition of any buildings on the stand will probably be immaterial since they may well have to be demolished to make room for development. “Savvy investors will therefore look for bargains in established areas – they are, in effect, buying the land rather than the home.”

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