Affordability: developers need to take heed

Affordability holds the key to the future health of the South African housing market – and developers should take heed of this fact.
Commenting on FNB predictions that house price growth is likely to slow to single digits later this year, Martin Schultheiss, CEO of the Harcourts Africa property group, says it is clear that lack of affordability is currently a major obstacle to sustained demand in the housing sector.
“And without growing demand, price growth will decline,” he says. “Ours is a market where the greatest need is in the essential buying category, that is, people need an affordable roof over their heads, as opposed to leisure or speculative buying.
“And it is not only essential that greater volumes of affordable units are brought to market for prospective owner-buyers, but also for the affordable rental market, where better stock levels will spur greater investment.”
He says the household sector remains under pressure, with the latest figures showing the ratio of debt to disposable income still at nearly 80%. And while this paints a rather bleak picture for prospective homeowners, especially at the lowest end of the market, it also means that they will be looking for affordable rental homes if they cannot muster the finances to buy their own.
“Developers would do well to take note of this need and adapt development plans to cater for this sector. Although affordability is a common denominator, property investors are also looking for additional features - and developers who want to tap into this market should take heed.
“For instance, investors want compact properties with easy access and hard-wearing surfaces for easy maintenance. Tenants typically occupy units for an average of two years and landlords are keen to keep refurbishment costs to a minimum at the end of a lease period. Therefore, tiled floors are preferred to carpets, for example.
“Investors may also show a preference for built-in appliances and other facilities, such as pre-paid meters for electricity. And of course affordable units with low maintenance requirements would find favour among owner-buyers too.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us