Is high density living really unappealing to South Africans?

FNB property sector strategist, John Loos recently posed this question and we take a closer look at his answer and the subsequent report.

It has been a common belief that South Africans prefer low density living and that most of us are averse to the “high rise living” concept, but this belief might be somewhat exaggerated.

Spacious living around our major cities can be attributed to high levels of economic infrastructure development up and until the mid-1970’s, which allowed urban sprawl to take place with relative ease.
However according to Loos we are forgetting that South Africa does in fact have a history of high density living amongst the middle class. He refers to many middle class citizens which lived in areas such as Hillbrow and Berea in Johannesburg before the city centre took a turn for the worse. 

These areas were very popular with the young working class households who would live in the city centres on a long term basis before moving out to the more spacious suburbs later on.

He notes that inner city living was very popular amongst the middle class during those days as it offered an affordable accommodation solution for young graduates, gave them the “low maintenance/lock up and go” convenience that many wanted, and of course kept their work-related commuting costs and time down. Add to this that many of the city’s famous evening entertainment venues, to which the “Yuppie” set were so attracted, were in close proximity to such areas, and it was almost a “no brainer”.

The lesson from the likes of Hillbrow/Berea’s more “illustrious” past, therefore, is that high density/high rise living can be attractive, if it is well run and not lacking the necessary leisure, entertainment, education, health and transport amenities and services.

“Regardless of the answer, densification is a reality,” he says.

According to FNB’s valuations data indications over the last decade or so point to an increase in Sectional Title units, as they make up 15% of properties built during this period. 

“This doesn’t sound like a high percentage yet, but it well-exceeds the percentage in the few decades that came before. In addition, of Full Title Units valued that were built from 2010 to 2013, the average stand size was 498 square metres. This represents a big decline from a high of 1068 square metres average for the Full Title properties built from 1970 to 1974. Of those built from 2010 to 2013, 10% had swimming pools, down from the 40.6% of those built from 1980 to 1984,” he says.

As stand size declines, at a faster rate than average Full Title building size, the average Full Title Land Utilisation rate, by build date, has crept up from 20.7% for homes built from 1970 to 74, to around 30% over the past decade.

A general theme since the 1970s has thus been clear from the FNB Property Barometer data…..smaller stands, smaller building size, and less leisure amenities on the property. Much of this has been done to address a mounting land scarcity from the time that Government Economic Infrastructure Spend slumped in the late-1970s as the then-Government’s fiscal position deteriorated.

This category of General Government Spending has improved marginally in recent years to 2.3% of GDP by 2013, but remains far below the levels of the 1960s and 1970s.

It has been simple economics in the form of growing land scarcity as the urban population increases, and rising competition from consumer goods/services, that has been a big driver of densification and the move to living in smaller-sized properties.

However, the big change in the next 10 years or more, compared to the past, will need to be a greater effort to create a more orderly and planned densification, with a likely bigger focus on building “higher”.

High density demand in and around the country’s prime business nodes can be expected to proliferate, as well as on any “state of the art” transport corridors, such as in close proximity to certain Gautrain stations. Such transport corridors can thus be expected to be a key driver of residential property values in close proximity in the coming years.

Read the full report here

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 20 Apr 2018
      Whenever changes in the political ecosystem of a traditional property market create uncertainty, smart investors begin to look elsewhere for new opportunities. Property experts at IP Global have analysed the trends and crunched the numbers to find new markets to explore in Europe and the United States.
    • 20 Apr 2018
      Energy and water self-sufficiency are increasingly important factors in home buyers’ choice of property – especially in Cape Town where the extreme drought of the past few years has made municipal supply costly as well as uncertain.
    • 19 Apr 2018
      During the last decade, rampant development has progressively transformed Cape Town’s property landscape with densification being the order of the day, but there are still one or two hidden gems like Scarborough which have retained their original character, offering an inimitable lifestyle and an attractive investment opportunity.
    • 19 Apr 2018
      The rental market is a cut-throat sector of the real estate market that waits for nobody. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, first-time renters need to be fully prepared before they even start the process of looking for a place to rent in order to avoid the disappointment of losing out on their ideal property.
    • 19 Apr 2018
      Choosing to buy your first home instead of continuing to rent is a big decision that will usually take some time to put into action, but the sooner you can save up a sizeable deposit, the closer you will be to reaching your goal.
    • 18 Apr 2018
      Selling your home is no small task and as you will quickly find out, there are a lot of misconceptions about the process. Gerhard van der Linde, Seeff's MD in Pretoria East lists the top 5 misconceptions when you are selling your home.
    • 18 Apr 2018
      The Cape Town municipality is now installing water-management devices at properties that have been non-compliant with the new level 5 water restrictions and there are talks of fines between R5,000 and R10,000 for households that use too much water.
    • 17 Apr 2018
      The recent interest rate cut has stoked the coals in the first-time buyer’s market. At least for the next two months until the next interest rate announcement, homeowners are guaranteed lower monthly instalments than in the previous quarter. But, is it wise to take out a 100% bond just to enter the property market while interest rates are low?
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us