The Rise And Rise Of Sectional Title
Post by: Eastlands Estate, 27 Aug 2019
When it comes to housing, trends are changing – particularly when it comes to choosing where to spend our golden years. There is a definite move towards smaller living spaces. Easier and cheaper to maintain, and with reduced monthly utility costs, it makes sense for those approaching retirement to look at downsizing without compromising on luxury or security. This is just one of the reasons why sectional title units in secure, easily accessible estates, are in such high demand.
According to Sandra Golden, senior research analyst for Pam Golding Properties, 57.7% of all new properties built by the end of the first quarter of 2019 were sectional title properties. Compare this to just 13.5% in 2010, and you can see just how quickly this market is growing. The trend is countrywide, with KZN, Gauteng and the Eastern and Western Cape all showing similar figures of close to two thirds of new homes sold being sectional title.
In tandem with this trend is the growing demand for top quality retirement accommodation. In fact, retirement property is the fastest growing residential investment segment in South Africa. As such, these properties are realising between two and three percent capital appreciation per year. Not surprisingly, a large percentage of these properties are sectional title units.
And it’s not just retirees purchasing these homes. Quality homes in high-end retirement lifestyle estates are attracting younger buyers looking to secure a long-term investment. Others are securing the ideal lifestyle for their parents to enjoy, while ensuring they have a property that’s guaranteed to appreciate in value.
Traditional retirement homes are fading into the background in favour of retirement estates that offer flexible, active living, coupled with comprehensive lifestyle, medical and leisure facilities, all within a secure residential community.
Why Are Sectional Title Properties So Popular?
Many retirees are not in a position to buy the kind of home they want to live in in their latter years, so there is a thriving rental market in the luxury retirement sector. This means these types of properties represent a fantastic investment opportunity.
But why are sectional title properties in particular so popular? What is it that makes them preferable to other types of ownership?
Sectional title properties are well represented through all segments of the property market – from the highly affordable right through to top-of-the-range, multi-million Rand properties. But in general, sectional title homes tend to be more affordable than their freehold counterparts. This makes them hugely appealing in our weakening economy. Coupled with growing demand for properties in already-developed areas, and a scarcity of greenfield space, it’s not hard to see why sectional title properties hugely appealing.
Many retirement properties fall under the life rights umbrella, and residents don’t have the freedom to maintain their own homes and gardens. Sectional title properties, on the other hand, are great for those who enjoy gardening, DIY and generally looking after their own property.
Of course, one of the biggest advantages is that a sectional title property forms part of your estate on your death, so you can bequeath it to whomever you like. This makes it a highly attractive option for people who want to enjoy the security and peace of mind of community living while still being able to leave a legacy to their loved ones.
Sectional Title – The Details
So, we know that sectional title units offer good investment opportunities coupled with the security of community living. But when you read the small print, what else do you need to know about this kind of property?
Firstly, the term “sectional title” refers to the separate ownership of units, or “sections” within a single development or complex. So, when you buy a unit in a sectional title complex, you buy an undivided share of a common property. Sectional title developments are run by a Body Corporate, which is responsible for managing the development and taking care of its finances. Duties include arranging meetings, paying insurance premiums, ensuring owners and tenants abide by the Body Corporate rules and collecting levies.
Talking of levies, this is the fixed monthly cost all owners pay to finance cleaning and security staff, water and electricity for common areas, and maintenance of common areas. These could include a pool, tennis courts, gym, coffee shop, laundromat, clubhouse and communal park areas.
Because the costs of running and maintaining these types of facilities are shared between all the owners, residents are able to enjoy many more amenities than they might otherwise be able to afford if they lived in a freehold property.
At Eastlands, we firmly believe sectional title properties offer a highly desirable, financially secure purchase scheme. In your golden years, knowing that you own your own home, and have a valuable asset to leave to your family, brings immense peace of mind.
Properties at Eastlands start at under R2m, so why not make an appointment to view today? Your luxury retirement is waiting for you!
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