SA’s new residential development trends
From downscaling to financial buoyancy, new research shows why people are selling and reinvesting. Knowing what the market is looking for is key to investment success
WORDS: KIM MAXWELL :: PHOTOS: SUPPLIED :: CONTENT PROVIDED BY BUSINESS DAY HOMEFRONT
Residential property trends are evolving to cater for diverse buyer requirements and it is happening in the three major provinces: Western Cape, Gauteng and KwaZulu-Natal. What are the reasons for people selling and buying homes elsewhere and how are developers meeting this need?
In the FNB Estate Agents Survey for Q1 2019, surveyed agents listed downscaling due to life stage as the most prominent reason for South African home sales (23% of sales). Homeowners sell because of changes in their families or life stages, to lessen financial burdens or because they are relocating within SA. Improved security is high priority, whereas some are attracted to urban work opportunities.
Diversified developments are winning
Balwin Properties spokesperson Lisa Sinclair says the company’s numerous lifestyle estates and precinct developments in three key provinces are designed to satisfy residents’ requirements at every stage in their lives. She says Balwin’s developments appeal to first-time homeowners, families and older couples scaling down.
“For example, security or safety is a top priority at whatever age. Our lifestyle estates have world-class 24/7 security,” Sinclair says. This applies as much to Balwin’s Ballito Hills estate in KwaZulu-Natal as to The Jade, its apartments in popular Paardevlei Lifestyle Estate precinct near Somerset West.
In Cape Town’s Northern Suburbs, Rabie Property Group marketing and communications manager Natalie Du Preez says diversifying residential offerings across a portfolio has been proving successful. “We are definitely seeing some of the downsizing and lock-up-and-go trend, which is why our townhouses in Clara Anna Fontein and small and micro apartments in Burgundy Estate and Century City are quite appealing.”
Development flexibility means engaging with a wider buyer pool range. For instance, Clara Anna Fontein lifestyle estate offers “three distinctly different development approaches” in the form of family plot-and-plan homes (an erf is purchased and the owner designs or builds within guidelines); The Village smaller lockup-and-go homes created by the developer; and Oasis Life quality retirement estate homes.
Homeowners mindful of increasing costs are becoming creative. In FNB’s survey, agents throughout SA identify communal property purchases, bought jointly between friends or extended family for shared bond repayments and expenses, as a new trend. The survey concludes that although supply demand imbalances prevail, they don’t seem to have worsened during the first quarter of 2019.
Off the base of the May elections, there is new optimism about market prospects. Meaningful near-term recovery will pivot on improved economic conditions. “Affordability is key,” says Werner Scheffer of Multi Spectrum Properties, behind Cape Town’s popular Buh-Rein Estate. “As a developer, we know we have to speak to a wide audience and offer the ideal combination of products.” These would target an investor, someone looking to buy their first property or a retiree who is scaling down. Buh-Rein’s two-bedroom Blue Lily Lane apartments start from R1.16m, and its Sterling Grove townhouses with garages start from R1.82m.
“We believe a big driver is that people would like to stay in a safe environment offering great potential on their investment as well as lifestyle,” says Scheffer, adding that homeowners who travel often like “knowing that their property and loved ones are safe”.
In Somerset West, Mzuri Estate spokesperson Craig Page-Lee says smaller apartments, townhouses and “Safety is a top priority at whatever age. Balwin lifestyle estates have world-class 24/7 security” Lisa Sinclair, PR manager, Balwin Properties home options meet different demands in terms of size and affordability. This suits their buyers, from families needing to downscale (due to retirement or children leaving home) to young families, new couples and divorced or single parents. Mzuri’s luxury two-bedroom Imbali apartments are priced from R1.895m.
RE/MAX reports Lightstone Property data that shows a 5.7% decrease in the number of bonds registered from January to March 2019, compared with Q4 2018. RE/MAX of Southern Africa CEO and regional director Adrian Goslett says the first quarter tends to be slower, so a drop in transactions is not unusual. “The first quarter of 2019 experienced a 25% growth on the number of bonds registered in the first quarter of 2018. This means that banks’ lending appetites have increased,” he says.
Paying a premium for urban convenience
Goslett notes an improvement in luxury market sales in Q1 2019, with 15.8% of transactions occurring between R1.5m to R3m, and homes that sell for more than R3m accounting for 5.4% of all bond registrations. “The high-end market was the least affected by the overall decrease in the number of registered transactions.” Goslett says properties priced above R3m showed only a 0.8% decrease compared with Q4 2018. “This same segment has grown to 5.4% of all transactions this quarter, the largest this segment has been since Q3 2017.”
One recently launched luxury urban development meeting the demand for flexible living in Cape Town is The Rubik, where premium inner-city apartments sell from R2.4m to R15m, with offices and retail space below them. Dogon Properties director of developments Rob Stefanutto says the concept of “living, working and playing in one place, where your time matters” is what appeals to their target consumer.
“The Rubik is creating a new segment of top-end apartments not there to fill a gap in the market as an alternative to the Atlantic Seaboard, but to offer inner city living with an exclusive address for a different consumer,” he says.
Amdec Property Development also put its weight behind downtown urban secure apartment developments. At No 1 Harbour Arch, the first residential tower to be developed in this new Cape Town precinct, 97% of units are already sold. Similarly, Amdec’s 240 units at One on Whiteley in Johannesburg’s Melrose Arch mixed-use precinct has seen sales of R630m since the residential development launched.
Amdec sales consultant Tersia Taljaard says in their experience properties are changing hands due to life or family stage, and because people want to be closer to urban work opportunities. “The largest percentage of buyers in Melrose Arch are investors who buy to let. The remainder is split between purchasing units for business when people visit Johannesburg and those who have scaled down, having moved closer to the city for work.”
Up- or down-scaling to luxury estates
At Steyn City in Midrand, a variety of property types means this developer targets a broad market. “We have found that people invest for many different reasons,” says Steyn City marketing group head Tammy Menton. “Security is, of course, a primary concern, but many look to Steyn City because of its design as a city within a city.”
She says ensuring that multiple facilities are provided for a live-work-play lifestyle allows residents to “do a school run, drive to work, leave for home and fit in a quick jog without venturing beyond our gates”. All this has implications for time saving too.
Launching in June, 104 on Creek is Steyn City’s latest apartment offering, with two-bedroomed units priced from R2.6m. Every apartment has views of a creek and a dam against the backdrop of Johannesburg’s southern skyline.
Rather than downscaling, Century Property Developments says the trend among its tenants and purchasers seems to be the other way round. “Our brand is very aspirational so we find our clients are upscaling, rather selling a smaller home in Waterfall Country Village Estate to purchase a stand in Waterfall Country Estate in the same Midrand development. They move from renting an apartment to renting one of our clusters,” says sales, rentals, marketing and operations executive Jessica Hofmeyr. “The only downscaling we’ve seen are clients who moved into our Mature Lifestyle Estates situated within Waterfall. These are industry leaders looking for a lock-up-and-go rather than a large house in Hyde Park or Bryanston.”
In the Winelands, Val de Vie’s amenities include a signature golf course, a barber, a spa, a CrossFit gym, restaurants and a coffee roastery. Group marketing director Ryk Neethling believes offering multiple home options with plenty of amenities is crucial to success in a luxury estate. “Over seven years we’ve adapted our offering to cater to a wider client range but also to capitalise on their changing needs,” he says. “We see young families moving from entry-level houses into larger homes. Or older couples down-scaling or moving into our retirement village.”
Relocators and super-commuters
A number of Gauteng semigrators have relocated to KwaZulu-Natal. Seeff Umhlanga director Brett Botsis believes Umhlanga Rocks is “evolving into the most in-demand area in SA”, having overtaken Sandton. Seeff is marketing 104 on Wager, Balinese-inspired luxury villas in Umhlanga’s Izinga Ridge. Further north at Sheffield Beach, Zululami Coastal Estate offers two-bedroomed Aura apartments from R1.89m, with on-site amenities and surrounded by indigenous vegetation.
Hugging the coastline closer to Ballito — and the airport — is Zimbali Lakes Resort. Zimbali’s marketing manager Erik Steele cites numerous reasons for sales: families are drawn to secure estate living and wish to relocate to the North Coast, or upcountry buyers want an investment apartment at the seaside. Some families live on the estate, with a breadwinner commuting to Gauteng on a weekly basis.
Boulevard Suites is Zimbali’s executive-style, lock-up-and-go studio, one- and two-bedroom apartments, priced from R1.15m. A serviced short and long-term letting service makes these a sound choice not only for residents but investors too.