Honey, I shrunk the house!
South Africans have traditionally been spoilt for property space, but that’s been changing in recent times and, in keeping with trends elsewhere in the world, the process is set to continue with properties becoming smaller.

The implications for developers, estate agents, homebuyers and all other stakeholders in the property sector are far-reaching says RealNet property group CEO Tjaart van der Walt.

He refers to statistics from Absa showing that historically the average stand size in South Africa was 1275m², but by 1991 had dropped to 932m² and by the fourth quarter of 2006 (the latest available statistics) had decreased to an average of 520m².

As to actual house size, the most recent numbers from Statistics South Africa show that from January to August 2007, the average house size for which new plans were passed was 135m² – only a little larger than the average flat or townhouse size of 129m² and well within Absa’s ‘small house’ category of 80m² to 140m².

“In other words our properties are getting smaller under the pressures of building costs, affordability, the broadening base of home buyers and the need for more efficient use of services,” says Van der Walt.

“We are not alone in this of course. Anyone who has visited the UK or Europe will know how small their homes are generally and now even in the United States, the land of the big and brash, home builders are putting up fewer supersize homes as significant numbers of buyers start to demand smaller units.”

Boston real-estate research firm Hanley Wood Market Intelligence predicts that floor areas are going to get even smaller in tune with the market realities of higher prices and tougher financing with buyers finding it difficult to qualify for home loans in the wake of the sub-prime mortgage scare.

Home sales in the US have dropped some 19 percent over the past year leaving builders saddled with unsold stock, particularly of larger homes. According to the American Institute of Architects this is causing them to redraw their blueprints indicating that the next step after reducing prices on current inventories of unsold homes is to start building to a new market.

And, says Van der Walt, exactly the same trend is evident in South Africa, “notwithstanding the fact that we have had better credit controls on home lending”.

Article from: www.iafrica.com