Why your next property purchase should be a sectional title home


Post by: Eastlands Estate, 01 Jun 2018

For the last two years, sectional title homes (i.e. those homes located in housing estates) have outperformed freehold homes in terms of house price growth.

Industry analysts agree this is largely due to the affordability of sectional title homes against a backdrop of economic uncertainty, combined with the highly sought after benefits they offer homeowners in terms of increased security and reduced maintenance costs.

Growing demand

These factors have fuelled strong demand among South African property buyers for sectional title homes.

In fact, construction industry analyst, Industry Insights, says that given prevailing market conditions and current national building-related statistics, this positive growth trend is set to continue in the coming years. It also forecasts a general slowdown in demand for bigger, luxury homes in the future.

What does all this mean? Basically, homeowners and investors seeking affordable property investments that will deliver solid returns on their investments in the future, are looking to invest in well-managed sectional title properties.

It also means that as this property demand increases, so the price of sectional title properties will creep up too, making now an excellent time to snap up sectional title properties while they are still affordable.

But just how affordable is that? Well, in January this year, property data put the national median price of a freehold home at R1.122 million, with the national median price of sectional title units coming in at R1.018 million.

Affordable retirement homes

We are proud to say that at Eastlands Mature Lifestyle Estate, our units start at R1 091 million – perfectly in line with these industry norms and not overinflated as with some retirement estates.

Our own data also supports this overwhelming trend of increased demand for high quality sectional title housing, with our first three development phases being completely sold out, and our fourth and fifth phases only boasting a handful of remaining units.

We are currently selling Phase 6 of the development, and units are moving fast. There is no doubt, homeowners are eager to get in on the sectional title property action while they still can.

Although sectional title properties are common in general housing estates, they are less so in retirement developments, which tend to favour the life rights model.

Sectional title vs life rights

By comparison, in a sectional title property where you as the purchaser retain full ownership of your unit once you have bought it, a life rights property only offers you as the purchaser the right to occupy the unit for the rest of your natural life.

In other words, you never actually own the unit. It remains the legal property and the responsibility of the complex or estate developer, and when you pass away, the developer is legally entitled to ‘sell’ the property to another life rights buyer.

Of course this model does not make sound financial sense if you are looking to harvest any return on your initial investment.

We understand how important it is for over 50s to properly plan for their retirement, right down to their future housing, lifestyle and financial needs, which is why Eastlands offers the best of all these worlds.

Not only does our upmarket retirement estate offer a range of affordable luxury homes, but also full access to world-class health and wellness facilities along with strong investment opportunities in sectional title properties.

It’s clear, the time to buy your forever (sectional title) home is now, so why not pop into Eastlands this weekend, and come find your place in the sun?

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