It’s a good time to downscale and cut costs

Pretoria empty-nesters and retirees looking to cut their living costs by downscaling from a large family house to a smaller home should do so without delay, says Jan Davel, MD of the RealNet estate agency group.
The reason, he says, is that the average nominal price of large homes (220 to 400sqm) in the metro has increased by 7,6% in the past year, while the average price of medium homes (140 to 220sqm) has declined by 3,7% and that of small homes risen by only 5,6%.
“According to Absa’s latest housing review, that puts the average price of a large home in Pretoria at almost R1,8m currently, and that of a small home at less than half that – or R720 000.
“And that means that owners of large family houses who sell now might well be able to buy their next, smaller home for cash, depending on how much equity they have in their existing home. If they have paid off or nearly paid off the 20-year bond on their house, for example, they could probably realise enough cash from a sale now to buy a cluster or sectional title home in a secure complex outright – or at least to put down a really sizeable deposit.”
What is more, Davel says, downscaling will enable them to immediately start generating savings on maintenance, property taxes, insurance and utility costs that will most likely more than cover the monthly levy in a security development, or be available for further investment to boost their “retirement fund”.
However, he says, there is some urgency, as the Absa figures also show that price growth in the large home sector of Pretoria’s residential market has been slowing down in the past few months, while that in the medium and small home sectors has been speeding up.
“Supply is also becoming constrained, especially in the small home sector where repeat buyers who are trying to downscale often find themselves in competition with keen first-time buyers, and with the relatively low level of building activity currently, there is likely to be further upward pressure on prices.
“Meanwhile, those who are perhaps contemplating a move from an elderly family house to a newly-built smaller home should bear in mind that such homes are currently about 37% more expensive than similar pre-owned homes, and this will cut into any profit they make on the sale of their existing property.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 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.
    • 20 Nov 2017
      Property valued at approximately R1 billion is on High Street Auctions’ sales floor during the month of November, including the much-anticipated sale of the Tshwane Mayoral Residence and the land occupied by one of South Africa’s oldest operating gold mines.
    • 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.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us