Gated estates count for 25% of SA's residential market

Private Property South Africa
Cathy Nolan

South Africa's secure gated estates account for more than a quarter of the value of South Africa’s total property market as far as residential properties go,” says Jeff Gilmour, president of the Association of Residential Communities (ARC).

“This is clear from a newly-released ground-breaking study by the Property Sector Charter Council (PSCC), which has established the value of property in the residential sphere in South Africa at R3-trillion. A recent survey conducted by ARC found that home owners associations (HOAs) in gated estates have assets of R800-billion under their management, which is close to 27% of the R3-trillion total market value, says Gilmour.

Double the value of shopping centres

“It is also almost double the R420-billion value that the PSCC put on the nation's retail shopping centres,” he adds. The ARC survey also established that annual rate payments by estate home owners amount to R4.7-billion, while their collective levies total R8-billion annually.

Furthermore, the survey showed that 87% of the average property values in South African gated estates are more than R2-million; 67% are over R3-million; 34% exceed R5-million; 16% are more than R7-million; and 8% are over R20-million. “These are some of the vital statistics that underline the sheer scale of the secure gated estate component of South Africa’s property market in the residential arena,” says Gilmour.

ARC is focused on assisting HOAs to manage residential estates more efficiently. In the process, the primary aim is to protect and grow the value of residents’ homes. “The survey was conducted across 80 of our 130 member estates and the results were then extrapolated across the rest of our membership, as well as non-ARC affiliated estates nationally,” says Gilmour.

Safety a main reason

“The popularity of secure gated estate living has mushroomed in South Africa since 2000. So much so that it is today one of the most highly desirable lifestyles the real estate market has to offer. The underlying reason for this is the safety and freedom of movement that home owners enjoy,” says Gilmour.

“Estate home owners pay a significant premium for this feature, the benefits of which are reflected in the higher-than-average value of their homes. These values should clearly be jealously protected and grown - not only by the home owners themselves but also by the management organisations that act for them and, not least, ARC,” he concludes.

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