Why sectional titles units have become so popular in South Africa.
Buying a sectional title unit has proven to be very popular in South Africa, especially if the development is well-situated. This has been evidenced by the fact that a recently launched development in Northriding, Northgate Heights, sold out its first phase in a matter of months, says Robbie Kreser, Broker/Owner of RE/MAX Executive Group who is marketing the development. He adds that the second phase of the development, which will be launching on 31 January this year, is expected to also be received as well by buyers.
“The current demand for sectional title units in the Northern suburbs of Johannesburg far outslips what is currently available to buyers,” says Kreser
Many buyers are choosing to invest into a sectional title scheme because of the level of security and community that this sort of property provides.
Another aspect that is making this option popular among buyers is that sectional title units are often more affordable than full title cluster homes, but generally offer similar security and lifestyle benefits. Kreser notes that aside from the fact that the prices of sectional title units are generally cheaper than full title homes, there are other aspects that bring down the cost to the homeowner once they have bought a sectional title unit. “An owner of a sectional title unit is generally only responsible for the maintenance of the interior of their unit, while maintenance costs for the exterior of the property are for the body corporate account in most cases. Additionally, charges for resources such as water and electricity are shared among the homeowners living in a sectional title complex, which means the costs are normally lower than that of a freestanding property,” Kreser explains.
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that sectional title units are ideal for first-time buyers or those eager to get their foot onto the first rung of the property ladder. However, it is important for all buyers looking to invest in these schemes to apply the same golden principles they would to buying any property. Firstly, do the necessary research and secondly, buy in the right location.
Kreser adds that Northgate Height’s ideal positioning and the fact that it offers good value-for-money properties has greatly contributed to its success. “The development has been well-positioned in terms of the wide range of amenities in its proximity. Northgate Heights is among a hub of facilities including Northgate Shopping Mall, Virgin Active gym, Olivedale Clinic, the Coca Cola Dome and a number of good schools. Very few areas, or developments for that matter, provide access to so many amenities, while still remaining reasonably priced for the first-time buyer market,” says Kreser.
According to Kreser, an advantage of buying a brand new unit within a development is that while the buyer is still liable for conveyancing costs, they do not have to make provision for transfer fees over and above the purchase price, which banks do not finance. In a transaction involving a property in the development stage, the developer will charge VAT on the transaction instead of the buyer paying transfer duty.
“Apartments in Northgate Heights range from one-bedroom; one-bathroom designs to three-bedroom; two-bathroom configurations, ranging in size from 62m2 to around 96m2, depending on the arrangement. Pricing for the one-bedroom, one-bathroom units starts at around R699 000, while two-bedroom, two-bathroom units are priced from R995 000, three-bedroom; two-bathroom units are priced from R1.295 million while the exclusive loft apartments are priced from R1.17 million,” says Kreser. “Once complete, the development will feature an onsite restaurant, a micro-brewery, a clubhouse with recreational room, a picnic area and a gym. The entire development will also be Wi-Fi enabled.”
According to Kreser, sectional title units will continue to be popular among security conscious buyers in the future and provide a good return on investment if the principles of buying property are adhered to. “This type of property provides a low-maintenance, cost-effective opportunity for buyers wanting to purchase a brand new property in a secure environment,” he concludes.