According to the latest FNB Property Barometer the proportion of new flats and townhouses as a percentage of total new housing units is significantly above its long-term average of around 30%.
So far this year, these units have accounted for about 60% of new stock - up from 29% in 2015 and 13% in 2000 – as developers pull out all the stops to meet demand.
FNB Economist, Siphamandla Mkhwanazi, believes this trend could be explained by the increasingly urbanising population, rising densification in the metros, and changing consumer preferences - for example, buyers tend to be more security conscious in their buying decisions than in the past.
Security is one of the main reasons people decide to downscale to townhouses and apartments in secure complexes. Freestanding properties need perimeter walls or fences, as well as beams, alarms and cameras for owners to feel secure. These are expensive to install and maintain, so it makes sense for buyers to look at smaller homes in security estates or apartment complexes that offer security measures at far lower cost.
Other considerations include:
Location - The price of fuel has increased exponentially in the past two years, and traffic congestion is on the increase in most metros. These factors have led many buyers to downsize their homes and move closer to work and schools.
Smaller homes obviously require less in the way of general maintenance, but smaller properties are not necessarily cheaper. If your objective is to be closer to family, then you may be restricted in where you can live and may have to compete with first time buyers, landlords, new families and others who are also looking for smaller properties with gardens, amenities within walking distance and good transport links.
Finances – With constantly rising fixed costs such as electricity, rates and transport, household disposable incomes are under severe pressure. The cost of general maintenance and the upkeep of gardens and swimming pools has resulted in a shift away from larger homes as buyers opt for smaller properties that are cheaper - and easier - to maintain.
Retirement – More older homeowners are moving from larger family homes to compact low maintenance properties. Lifestyle estates generally offer more security along with essential healthcare and support services sought after by older residents and a range of lifestyle and sports amenities, activities and wellness facilities.
Pros and cons of moving to a flat or townhouse
If you are moving from a freestanding house to a townhouse or flat, you need to bear in mind that you will be far more dependent on your neighbours than you are accustomed to. A house is a self-contained unit generally separated by at least a little space from other houses. In contrast, a townhouse or flat shares space with other units. If you value privacy and want space away from your neighbours you may have difficulty adjusting to communal life.
With a flat or townhouse there can be restrictions on pet ownership and rentals, which can be good or bad depending on your preferences. You will need permission to do almost anything outside your unit including landscaping, adding security features or changing any pre-existing conditions.
A complex or apartment block may offer amenities you might not otherwise be able to afford such as a pool, a clubhouse, or a gym as well as access control and 24-hour security guards. Many expenses for maintenance are borne by the home owners’ association or body corporate.
Costs to consider
The cumulative costs of selling a property can be considerable and should be carefully considered and accounted for before downsizing. These could include estate agent’s commission, transfer duty and conveyancing fees, as well as the costs of furniture removal.
Getting down to work
Downsizing involves a lot of different tasks, some of which you may not have considered. You will need to sell your current home and buy another. That means appointing an agent, hiring an attorney, researching neighbourhoods, probably changing home types – from a single family house to a flat or townhouse - getting rid of at least some of your possessions and perhaps buying new furniture that will fit into your new home.
Whatever you do, don’t leave clearing out clutter to the last minute. Decide upfront which furniture, appliances and other items you want to keep and those you can do without. Then sell things online, donate to local charity shops and offer items to family and friends.