DEMAND FOR SECTIONAL TITLE PROPERTY IMPROVES AS FIRST TIME BUYERS ENTER THE MARKET
Category News
Sectional title property is in demand, with the increase of first time home buyers onto the market, together with improved leading conditions - sectional title property prices are on the rise.
For the first time since 2007/2008, there are signs that sectional title developers are coming back into the market, on the back of increased demand from first time buyers entering the market!
Jawitz Properties’ CEO Herschel Jawitz says that recovering property conditions are prompted by a ‘push-up’ approach from the lower end of the market. This push up is critical to the recovery of the market as it allows those sellers to move up into the middle price market and so on! Despite high levels of consumer debt, demand in this segment is strong and is always a good indication of where the market is heading.
“With house prices still offering good value and interest rates at historic lows, there is no shortage of first time buyers but access to finance remains a challenge. Affordability is not the issue but rather having enough for a deposit and transfer costs. The situation has eased with the banks now offering 100% bonds to certain clients up to R1.5 million but the decline rates still remain high.
First time buyers generally buy sectional title units – townhouses or small apartments but supply of these units is constrained. It is only now that developers are getting back into the market but with long lead times, demand will outstrip supply in the short and medium terms. As demand continues to outstrip supply, prices are expected to rise.” he says.
Jawitz cautioned entry level buyers to do their homework before buying into a sectional title complex. Issues such as the financial state of the complex, how well it is being managed, are there any law suits against the building, how well it is maintained and are there any special levies in place. Care should be taken to enquire about the Body Corporate’s rules especially relating pets on the premises. It’s also helpful to find out who is responsible for repairs and upkeep. The rule of thumb is normally that anything relating to the interiors is for the owner’s account, but any exterior repairs are the Body Corporate’s responsibility.
“We find that owners tend to be apathetic about getting involved with the Body Corporate which is counter productive as they invested in a unit and it is in their interests to protect their asset. By the same token, some people baulk at the rules and regulations attached to a complex, but in truth, the stricter the Body Corporate and the more pedantic it is, the better those complexes are run, and the more financially secure they are. Ultimately the rules are there to enhance the value of the complex that will inevitably increase the owner’s return on investment when it comes to selling. Owners should always find out as much as possible from the estate agent before putting in an offer to purchase,” he says.
At the higher end of the market, lifestyle sectional title complexes are setting the trend, moving away from blocks of flats or townhouses. Buyers are more discerning and look for indoor pools, gyms, concierge services and communal entertainment. Also trending are urban neighbourhoods such as the Maboneng Precinct in the Joburg inner city and in Cape Town where the CBDs offer a cosmopolitan lifestyle, entertainment, a great night life and are close to work.
Author: Jawitz Website
