Developments

Mid-road or luxury?

HomeFront explores trends playing out in the mid-level and high-end property markets and discovers that new developments are still launching – and selling well

Pic credit:  The Grove at Sitari Country Estate in Somerset West

WORDS: KIM MAXWELL :: PHOTOS: SUPPLIED

Many security-aware South Africans are selling their freestanding homes in favour of property in gated communities. Golf estates have been popular traditionally, but eco-estate and wildlife development homes are now broadening the residential mix. Many move to upmarket suburban estates or smaller mixed-use urban developments, usually to apartments sold as sectional title. Mixed-use options are growing in demand because they offer convenient proximity that reduces traffic and helps people simplify their schedules. Lightstone Property reports that the residential property market has been in consolidation for a while, owing to the slow economy. “As the market currently stands, we see a slowdown across all segments,” says its January Market Review. In the Lightstone Area Value Bands Index, a property selling for more than R1.5m falls into a luxury band. FNB’s Property division last month defined a low-income area as one where the average purchase price is R395,900. Its luxury value band average purchase price was R2.3m. FNB’s prices fluctuate. HomeFront’s property market indicators fall somewhere in between. We’re exploring demand for homes or apartments in the mid-level – priced from R1m to R2.5m – and luxury high-end apartments or homes priced from R3.5m. In a tighter economy, which of these sectors is seeing buyer-seller movement? And what are the roles of influencing factors such as proximity to urban centres and schools, security, top amenities and nice-to-haves?

One on Whitely, an Amdec Property Developments offering in Melrose Arch, Johannesburg

SECTIONAL SURGE

Sectional title apartments often have mid-level pricing, although beautiful high-end units can be in demand too. In January, FNB Property Barometer compilers cited Stats SA data showing a surge in supply of all new residential units in 2019, particularly sectional title. In October 2019, the volume of new units increased by 67% year on year. Analysts picked up “a noticeable shift from freehold properties to more sectional titles in the past two to three years, with the latter now accounting for about 60% of new-build units”. According to FNB this trend is driven by densification and the fact that buyers across all income groups are more security-conscious. The upsurge is concentrated in Gauteng. Amdec Property Developments MD Nicholas Stopforth believes that while there is saturation in traditional property, demand for mixed-use developments is starting to outweigh supply. “One on Whitely in Johannesburg’s Melrose Arch Precinct is already 94% sold out, with only a handful of units available for sale,” he says.

Only eight urban units remain – these one-bedroom, one-bathroom units with a parking bay each are priced from R2.52m. The convenience factor is compelling. “Much of Johannesburg’s urban sprawl necessitates the use of transport to commute to and from work and indulge in leisure time, which is exhausting, time-consuming and expensive.” On April 21, sales launch of Newlands Peak in Newlands, Cape Town – a new sectional title development by Rawson Developers. “The vision is to set a new standard in sustainably designed and community-focused living,” says Rawson Developers’ Brad Morgan.

Comprising 232 luxury apartments over 11 floors, the geometric designed block will be flanked by two avenues with mature trees. Secure parking, 24-hour CCTV surveillance and biometric access control complete the offering.

Mzuri Estate, also in Somerset West, is marketed by Pam Golding Properties

SUBURBAN APPEAL

Suburban estates fill a need too. Popular Sitari Country Estate in Somerset West has sold more than 1,700 country and village homes, apartments and erven. It recently launched its latest sectional title development The Grove, which offers premium one- and two-bedroom apartments in three-storey blocks.

Offering mid-level value, The Grove’s prices start from R1.205m for a one-bedroom, one-bathroom unit with a parking bay. Superior fittings and finishes include stone countertops and vanities, a Smeg built-in oven and hob, integrated fridge, walk-in showers and wall-hung toilets. Will it sell? “The high-end specifications of the apartment schemes and amenities such as the Curro school and the new Sitari Village Mall are a very popular combination,” says Claudius Combrinck, property sales executive director at Sitari.

With apartments priced from R1.195m and townhouses from R1.895m, Mzuri Estate is another mid-level buy in Somerset West appealing to couples and new families. “For remote work, the clubhouse will provide shared office space with meeting and conference facilities, as well as high-speed internet,” says Pam Golding Properties Somerset West and Stellenbosch branch manager Louise Varga. Green play areas and an early childhood development centre is also planned for the estate. “According to Lightstone Property data, a large number of properties sold in Somerset West are in price bands between R1.5m and R3m,” says Varga, adding that 57% of the area’s buyers are younger than 50. “More single people are buying property, which is also driving demand for sectional title living,” says Pam Golding Property Group CEO Andrew Golding. “It’s not surprising in today’s world, where many people are delaying marriage or not marrying at all. We’ve seen many millennials buying homes in recent years.”

Kingsford Estate is one of several new developments in Westville

GROWTH NODE

In KwaZulu-Natal, Durban North is on the rise. “Durban North was the most searched suburb nationally on our website, according to the RE/MAX National Housing Report Q3 2019,” says RE/MAX of Southern Africa regional director and CEO Adrian Goslett. Citing Private Property statistics, Goslett says the median asking price in the province grew by 7% year on year in September 2019. RE/MAX Panache owner Grant Gavin predicts that this popularity will continue, as will growth in the Umhlanga and Cornubia zones. “The Umhlanga, Cornubia, Sibaya and uShaka Airport areas are growing, with new stock, developments and office parks. Durban North also has great access to the Durban city centre and the North Coast,” he says. “With school catchment areas being an important factor for families, this has always been a prime location for buyers, thanks to the abundance of amazing schools nearby.” Centrally located at a prestigious Westville address, Kingsford Estate is launching 22 homes in March, starting at R8m for a contemporary three-bedroom. The post-modern single- or double-level homes exude luxury and incorporate outdoor living and a pool. “It stemmed from our own needs and those of our family, friends and neighbours. We designed the estate and homes around that,” says owner-developer Mahomed Amod. Residents will enjoy security in a subtropical location, with site elevation offering sea and city views.

“There has been a noticeable shift from freehold properties to more sectional titles in the past two to three years, with the latter now accounting for about 60% of new-build units” FNB Property Barometer

Brookfield at Royal, the first luxury apartment development at the Royal Johannesburg & Kensington Golf Club

AMENITIES-DRIVEN

Something exciting coming to Waterfall, Midrand, is Munyaka (Venda for “crystal”), a R9bn development by Balwin Properties. Construction has started on Munyaka’s freshwater Crystal Lagoon, boundary wall, gatehouse, lifestyle centre and apartment show block. The balance of the apartments will be rolled out over the next eight years.

Mid-level buyers are the primary target for this amenities-driven development. The bulk of the 5,020 apartments will be architecturally designed one-, two- and three-bedroom units priced from R799,000.

Balwin will also develop two ultra-luxurious penthouses with 180˚ views of the Crystal Lagoon that are expected to be marketed at R30m. Targeting active luxury buyers (likely golfers), Brookfield at Royal in Sandringham is another sectional title development launching in March. Prices range from R1.19m for a 45m² one-bedroom to R4.19m for a 154m² ground-floor apartment with spacious garden and golf course views. “We’ve had more than R100m in sales already during the February prelaunch to Royal Johannesburg & Kensington Club members,” says Tim Kloeck, CEO of Tricolt, the developer of Brookfield at Royal. “It’s a big thing. The Championship East Course was rated number one in SA. This is probably one of the most illustrious addresses left in old Joburg. This part of town doesn’t have a security estate on a golf course.” Tricolt was also involved in developing The Houghton luxury apartments that overlook The Houghton golf course, and it launched luxury residential development Ellipse in Waterfall in late 2018. “The luxury market may seem dead but we’re prospering with R900m in sales in 2019 for Ellipse. So people are starting to see Tricolt as a solid brand for upmarket projects,” says Kloeck. “There is always a hook and a differentiator to a Tricolt project, and that’s why they support us.”

Outdoor living at Kingsford Estate

EXTRA FEATURES

So mid-level and high-end homes that offer the right mix are still selling. But how important are the “extras” in a tight economy? Most estate and mixed-used developers offer amenities and green spaces. Yet more and more buyers are looking for sustainable features as well. Mzuri has gone large with energy efficiency and green technologies. Varga says initiatives include solar and water management and providing solar-assisted geysers to houses and heat pumps to apartments. The development will also have its own electrical grid. “Homeowners are offered a system based on individual energy consumption habits, engineered to suit their home,” says Varga. Kingsford Estate’s developers Wildrose Investments give homeowners the opportunity to live off the grid by providing photovoltaic power options and borehole water supply. They will have back-up generators too. One on Whitely provides residents with a convenient environment of urban safety. “Johannesburg is currently a depressed property market, especially in the high-end luxury section title segment. Typically anything above R1.5m is languishing on the market,” says Stopforth. A location in Melrose Arch boosts value and sales, translating to a 30% buy-to-live and 70% investor market split for this development. “You can walk to the coffee shop or to your apartment at 2am in complete safety,” Stopforth says. “This is why we trade our unit numbers at a significantly higher volume than the general Joburg area and surrounds.”

“Brookfield at Royal is probably one of the most illustrious addresses left in old Joburg. This part of town doesn’t have a security estate on a golf course” Tim Kloeck, CEO, Tricolt

Newlands Peak by Rawson Developers

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