Can smaller apartments resuscitate the Sectional Title property market?
Category News
Rowan Alexander's comment regarding an oversupply of two-bedroom apartments in the Northern Suburbs of Cape Town does not imply that this market is without merit for buy-to-let investors. The plain truth is that such apartments will always be much in demand but if you are planning to buy sectional title property in the Northern Suburbs, you should now seek out those developments which have "something special, something different" about them.
Look for a small scale project, one which has 20 to 50 apartments in it; not one which brings 100 or 200 apartments to the market simultaneously. Big developments tend to flood the market with more homes than it can absorb in a short time and give tenants the chance to beat down rents.
Secondly, says Alexander, look for a development which offers extra factors that enhance the occupants' lifestyle. These could be an attractive location, innovative designs, well planned landscaping, close proximity to reputable schools and\or retail centres, sports clubs, gymnasia and medical facilities etc.
"It is very interesting to see how creative and imaginative developers in search of the "extra factor" have become. The designs today are more interesting and more appealing and this positive trend is evident throughout our precinct. One spin off of this, plus the temporary oversupply of two-bedroom apartments, is an influx of compact, well configured, "micro apartments", often with a bachelor (i.e. combined bedroom and sitting room area) or single bedroom and separate living area layout. These surprisingly popular apartments can have floor areas as small as 25m2 or 30m2. Alexander Swart recently sold a 20m2 micro apartment at a price that equates to R35 000 per m2. This is significantly higher than the going rate of R15 000 to R20 000 per m2 but priced at R700 000 suits today's cash strapped buyers." One innovative developer, says Alexander, initially planned to sell 60m2 two-bedroom apartments at R1,4 million but changed his plans to offer 28 and 31 m2 apartments at R700 000 to R740 000. The public's response was positive and the smaller units are selling well.
"As in the past, the leaders in our industry are quick to recognise the changes in market needs and are rapidly responding to them. If the recent trends indicate anything, it is surely that we will see further similar changes in future and that these changes may just be what is needed to resuscitate the flooded market." says Alexander.
For further information please contact Rowan Alexander on 082 581 3116 or by email : rowan@asproperty.co.za
Author: Rowan Alexander
