select
|

South African buyers appreciate the value of green homes

South Africa’s residential sector is embracing green, with new builds and existing stock the focus of a domestic market with already the highest percentage of green building projects currently underway. Sandra Gordon, senior research and market analyst at Pam Golding Properties, explained the current trends that will ensure the growth of green building from commercial to residential property sectors.


 
Speaking at the Green Building Council South Africa’s (GBCSA) 10th annual Green Building Convention 2017 conference held at Century City in Cape Town, Gordon said that the transition to green building practices in the local residential market is further encouraged by young first-time buyers who, with limited spending power, appreciate the value offered by green homes. Gordon was presenting her findings in a session entitled The Value of Green Homes: Usage and Attitudes in the Residential Space.
 
Trends turning the residential market green
 
“The service delivery and energy and water security offered by green precinct developments, along with the competitive pricing of sectional-title properties, are increasingly attractive to first-time buyers,” Gordon noted.
 
First-time buyers: young and cash-strapped
 
Two-thirds of South Africa’s population is younger than 34 years – the typical age of the first-time buyer – and, with almost half of all ooba new mortgages awarded to first-time buyers each year, the demand from young buyers in urban areas is expected to continue. Limited land in major metros will keep sectional title properties popular.
 
The jobs, services and opportunities of the city attract young people, forcing it to densify while becoming proportionally younger. Concurrently, as less convenient land remains underutilised and values appreciate, the expected trend is for price-sensitive buyers to move into sectional title property schemes, explained Gordon.
 
Older, more affluent buyers also favour apartments
 
The security of well-located apartments, and the appeal of downscaling draws older buyers. Travelling for work and family, and the increased rates and utilities costs associated with managing a home mean a growing trend towards smaller, if not necessarily less expensive, properties for older buyers. “More affluent residents are moving from freehold properties to luxury apartments, often in the same area. This is certainly the case along the Atlantic Seaboard,” Gordon said.
With both first-time and other buyers opting for apartments, metros are becoming increasingly congested - a trend aggravated by prevalent car ownership of the emerging middle class and the deterioration in some forms of public transport. Cape Town is currently SA’s most congested city and Johannesburg’s peak traffic period is extending by 15 minutes each year, and this long, crowded commute may become more expensive as the likelihood that petrol may soon be subject to VAT, Gordon noted.
 
In reaction, home buyers often vote with their pockets and relocate to a growth node, such as Cape Town’s Century City where they can live, work and play on one estate, or near a new transport corridor – new suburbs are opened when MyCiTi or Gautrain routes are extended, said Gordon.
 
Green precincts bridge commercial and residential markets
 
Currently, most available housing is freehold, but a growing demand for sectional title is outstripping available stock, and this demand is reflected in the proportion of building plan submissions for sectional-title units.
 
New developments in major growth nodes are increasingly mixed-use and include retail, office, residential and sometimes hospitality. This can be seen in Harbour Arch and Century City in Cape Town, Melrose Arch and Sandton Gate in Johannesburg, Menlyn Maine in Pretoria and along the North Coast of KwaZulu-Natal.
 
As mixed-use developments gain traction with buyers, green design is extending beyond buildings into the public realm, with the creation of  green precincts. “In this way, South Africa’s lead in green building in the commercial sector is impacting positively on the new residential housing market,” said Gordon.
 
Green estates hold sporting appeal
 
At least one in 10 South Africans choose gated communities when making residential property purchases, said Gordon, citing Lightstone research. There are currently nearly 7 000 estates with 355 000 active residential properties valued at R800-billion in SA. Here too the effects of the green transition are being felt.
 
Encouragingly, green estates are not limited to top-end eco estates. In the affordable housing market, green estates are also available with an emphasis on the potential savings on utility costs. Fourleaf Estate in Port Elizabeth, first fully EDGE certified residential development in Africa by the GBCSA, offers annual savings on utility bills of around R1 280. In addition to water and energy savings, the estate also encourages recycling and provides community food gardens.
 
Research indicates that there is a move away from traditional golf estates and a rise in demand for retirement and eco estates. According to Pam Golding Properties agents, the most popular estates are those with amenities like golf courses, but also cycling routes, jogging paths and sports fields, thereby accommodating a range of interests, Gordon said.
 
Is existing housing stock turning green?
 
During the past year most sales were of existing homes rather than new housing units, Gordon notes, who cited Gumtree Head of Property Barrie Swart’s comments that the inclusion of green features  means that homes  are sold or rented more quickly.
 
Keyword searches for “borehole water” and ”eco estate” and  steadily rose on Gumtree during 2016, and by last November more than a thousand properties were promoted as eco-friendly, sustainable or eco-sensitive – double the number in previous years.
 
While Gumtree does not believe that green features affect the price of the property, most Pam Golding Properties agents surveyed agree that green features do in fact result in a price premium being achieved for a home.
 
Costly utilities fuel green residential trend
 
The underlying trends in SA’s housing market suggest that the transition to green will continue to snowball. The anticipated growing cost of utilities coupled with electricity and water shedding increases the appeal of alternative, greener sources of energy and water, and greater efficiency for both, in homes.
 
More sustainable homes that are well-located and easier to maintain will continue to attract South African buyers, summarised Gordon.
 


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 22 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
    • 22 Nov 2017
      While sales have noticeably slowed in most sectors in most Cape town suburbs, the security estate sector in Constantiaberg has bucked the trend by remaining buoyant, with sales by August this year already surpassing total sales in 2016.
    • 22 Nov 2017
      The end of the year is fast approaching, and so are all the travellers, tourists and holidaymakers. For those who live near or own a property in a holiday-hotspot, the festive season also brings with it an abundance of short-term rental opportunities. Its a great way for property owners to make a few extra rand for their own holidays or to put towards their savings.
    • 21 Nov 2017
      The buying process is over, and the moving truck has delivered your household goods to your new property. Now it’s time to unpack and turn your new house into a home.
    • 21 Nov 2017
      When an offer to purchase a property is signed by both buyer and seller, this constitutes a binding agreement or “Deed of Sale” between the two parties. However, in most cases the “standard contract” might not be enough to cover all the specifics pertaining to the sale. The agreement may require some additions or alterations to clauses, which needs an expert hand in the drafting of such
    • 21 Nov 2017
      As more and more South Africans look to invest in property abroad, Spain is offering them one of the best deals in global real estate.
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK