Gated Estates - what is their value?

Gated estates account for more than a quarter of the R3-trillion total value of residential property in South Africa says the Association of Residential Communities.

South Africa’s secure gated estates account for more than a quarter of the value of South Africa’s total residential property market says Jeff Gilmour, President of the Association of Residential Communities (ARC).

“This is clear from a newly-released groundbreaking study by the Property Sector Charter Council (PSCC), which has established the value of residential property in South Africa at R3-trillion.

“A recent survey conducted by ARC found that Home Owners Associations (HOAs) in gated estates have assets of R800-billion under their management, which is close to 27 per cent of the R3-trillion total market value,” says Gilmour.

“It is also almost double the R420-billion value that the PSCC put on the nation’s retail shopping centres,” he adds.

The ARC survey also established that annual rate payments by estate homeowners amount to R4,7-billion, while their collective levies total

R8-billion annually.

Furthermore, the survey showed that: 87 per cent of the average property values in South African gated estates are more than R2-million; 67 per cent are over R3-million; 34 per cent exceed R5-million; 16 per cent are R7-million-plus; and 8 per cent are over R20-million.

“These are some of the vital statistics that underline the sheer scale of the secure gated estate component of South Africa’s residential property market,” says Gilmour.

ARC is focused on assisting HOAs to manage residential estates more efficiently. In the process, the primary aim is to protect and grow the value of residents’ homes.

“The survey was conducted across 80 of our 130 member estates and the results were then extrapolated across the rest of our membership, as well as non-ARC-affiliated estates nationally,” says Gilmour.

“The popularity of secure gated estate living has mushroomed in South Africa in the 2000s. So much so that it is today one of the most highly desirable lifestyles the real estate market has to offer.  

“The underlying reason for this is the safety and freedom of movement that homeowners enjoy.” says Gilmour.

“Estate homeowners pay a significant premium for this feature, the benefits of which are reflected in the higher-than-average value of their homes. These values should clearly be jealously protected and grown – not only by the homeowners themselves but also by the management organisations that act for them – and, not least, ARC,” he concludes.

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