Homes from traditionally affluent areas are no longer driving property growth in South Africa, with sectional title proving to be increasingly popular. This according to Pam Golding Property Group chief executive Andrew Golding.
Golding said the percentage of freehold property transactions had declined nationally from almost 90 percent of all sales in 2003 to 67 percent this year, with the percentage of sectional title property transaction increased from 18 percent of total transaction in 2003 to 22 percent this year.
He explained too that while property was still growing well in the Western Cape, it was Kwazulu-Natal and Gauteng that were the engine room of property growth in SA now.
“Sectional title property transactions in KwaZulu-Natal accounted for between 16 percent and 20 percent of total transaction, with no discernible trend,” he said, adding, “KwaZulu-Natal’s house price inflation was at 4.27 percent and Gauteng at 2.83 percent”.
Golding said Amanzimtoti last year replaced Umhlanga as the most popular sectional title offering in KwaZulu-Natal and added that last year 78 percent of all transactions in Amanzimtoti were sectional title properties compared to 71 percent in 2003 while the percentage of sectional title properties in Umhlanga dropped to 61 percent of total sales last year from 78 percent in 2003.
Golding added that KwaZulu-Natal was witnessing an influx of investors seeking property to let.
He said Durban was a great buy-to-let market because acquisition costs were low enough to make yields and gearing attractive while Umhlanga was also popular because both yields and capital appreciation were strong.