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Sectional Title Market Booming on the West Rand

Recent years have seen large scale development on the West Rand in Gauteng with sectional title properties and gated estates taking over in Ruimsig, Wilgeheuwel and Honeydew. Today the landscape on either side of Hendrik Potgieter – the main artery linking Roodepoort to the Cradle of Humankind – is dotted with rows of sectional title developments.
 
“I would say that while there are various reasons for the demand for sectional title properties in the area there are two main factors; the one being security and the other financial”, explains Johan van Schalkwyk, Principal of Leapfrog Property Roodepoort, “Given the high crime rate in South Africa people have a greater sense of security when living in a complex. Most of the people living in Roodepoort and the surrounding areas are workers and heavily affected by increases in petrol and electricity etc. As such they prefer sectional title properties with shared building insurance and services as opposed to shouldering the cost alone by buying a freehold property”.
 
Van Schalkwyk notes that the property value in areas like Wilgeheuwel has increased by around 8% since 2014 and that units typically sell within seven days of being listed; “In the greater Roodepoort area you can still buy a 1 bedroom flat for about R300,000 but we have noticed that all the action is in the market from R700,000 for a 2 bedroom simplex with a private garden”.
 
According to van Schalkwyk the market above R1.7 million is moving quite slowly as sellers tend ask unrealistic selling prices while the under R500,000 market struggles because buyers are either financially over-exposed or have bad credit records – making it difficult to obtain home loans. However, the market between R700,000 and R1.2 million is experiencing exceptionally high demand and thus serious stock shortages.
 
Questions to ask before buying a sectional title unit
 
While buyers might feel safer living in a sectional title complex and enjoy the perceived savings van Schalkwyk believes that there are a few important questions to be answered before signing an offer to purchase:
 
·         How effectively is the scheme’s body corporate operating? Essentially sectional title property is a form of joint ownership and it’s critical to establish whether the body corporate is managing the scheme correctly. A bank will also want to know about the financial viability of the scheme before approving a bond.

·         Does the scheme adhere to the stipulations outlined by Sectional Title Act 95 of 1986? The Act prescribes the management and conduct rules that apply to sectional title schemes.

·         What costs are you responsible for? Sectional title schemes are made up of individually owned sections and common property. The costs for the maintenance of the common property (such as drive ways, security systems, pools and gardens) are shared by all owners via a monthly levy. It is important to establish not only how much the monthly levy is but also what it covers and whether the body corporate is managing these funds optimally.

·         What, exactly, are you buying? It is possible to ask to see the scheme’s architectural plans, which is useful for establishing exactly what is meant for exclusive use (and is effectively being purchased) and what is common property.

·         Are pets allowed? If so, under what conditions? Certain schemes allow for cats or small dogs and it’s important to check this beforehand to avoid the heartache of having to give away pets.

 
“Buying into a sectional title scheme has a number of advantages such as increased security and shared costs. If a buyer’s done their homework they’ll not only live there happily but will also be able to sell the property at a profit in the future”, says van Schalkwyk. 


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