Sectional title property best performer

The latest FNB property survey, compiled by the bank's respected economist, John Loos, has shown that sectional title units have recently been far and away the best performers in the residential housing sector.

The FNB report shows that in both the fourth quarter of last year and the first quarter of this year, sectional title units sold faster and saw greater price rises than any other sector. Those units with less than two bedrooms did particularly well, showing a 6,6% price rise in the first quarter of this year. No other segment of the property market has equalled that kind of increase recently.

Rawson Properties' development company had identified this trend two or three years ago and since then has only built sectional title units. They are currently bringing 416 units to the market, in the Rondebosch area and Grassy Park at prices ranging from R750 000 to R2,2 million.

The major reasons for their popularity, apart from affordability, are the additional security such homes offer and the fact that most are well positioned in relation to work areas and to public transport.

People will now pay a 20% premium - or more - for security and an even higher premium from being able to cut down travel time even if this means opting for a smaller, less comfortable unit.

John Loos, the FNB economistmhas pointed out that the rise in first time homebuyers (now 22% of all sectional title buyers) has been a big reason for the success of this sector.

Again, we at Rawsons would agree with this but it has to be added that it is extremely difficult today to meet the cost limits set for first time homebuyers, particularly if the land is in a popular precinct, reasonably close to the city and has already been rezoned.

As Sean McCauley has said, a broadening of the base applicable to FT buyers, but keeping it limited to the affordable sector, would be very welcome indeed.

Article by: Bill Rawson - www.realestateweb.co.za