Rising interest rates mean falling affordability – and this is reflected in home buyers’ renewed interest in new, multi-unit developments where there is no transfer duty to pay, and where developers are sometimes also willing to subsidize other transaction costs such as bond registration and legal fees.
So says Gerhard Kotzé, MD of the RealNet national estate agency group. He notes that the lifestyle changes that are evolving post-Covid are once more driving demand, especially among young buyers, for homes in urban rather than suburban locations, and especially in buildings and complexes that offer their own co-working spaces, restaurants or coffee shops, recreation spaces, and sports facilities as well as state-of-the-art security.
“In many cases, the shared costs of the land – some of which have been held by developers for several years – is making it possible to offer units in these ‘whole life’ developments at relatively low prices, which makes them especially attractive to first-time buyers. There are currently a number of apartment developments even in the Cape Town CBD and central Sandton, for example, that have studio units available at prices from around R900 0000 to R1,2m.”
In addition, he says, there are several other factors in favour of buying into a new development. These include:
- Excellent security. “Modern apartment blocks - and gated estates - usually offer much more personal safety at much lower individual cost than buyers can achieve in pre-owned homes, and the newer the development, the more up-to-date its security equipment and access control methods are likely to be.”
- Reduced transport costs. “Fuel costs have risen really steeply this year and many young people are also concerned about the damage that the use of fossil fuels is doing to the environment, so they are keen to eliminate a daily commute to work,” says Kotzé. “Living in a whole life building close to their office or co-working spaces for remote workers as well as other amenities is a great way to do this.”
- Modern designs, fixtures, and fittings that are more suited to contemporary lifestyles, as well as energy-saving provisions and internet-ready homes with high-speed, fibre connections.
- Less maintenance, more energy efficiency, and lower incidental costs for at least the first few years of ownership, especially when compared to the costs of fixing, renovating or adapting a pre-owned property to get it “right”.
- Easier financing. “When you buy a newly-built home, the developer will usually have a mortgage origination consultant on hand to assist you to obtain a home loan and/ or an arrangement with one or more lenders to grant 100% home loans at attractive interest rates due to there being a lower risk in the property.”
