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Property performance by age: Freehold vs sectional title vs estates

25 Jun 2019

Property News

Brought to you by Property24

A recent report, Property Performance by Age, gives insight into the South African residential market, comparing price growth of freehold, sectional title and estate property.

Sectional Title sales of properties aged 30 to 39 years outperformed other age bands of properties in terms of average property growth per year, at 4.7%.

Lightstone, provider of property analysis and insights, has released results which show that of the Freehold and Sectional Title property sales, ‘Generation Z’ - properties registered between the 1991 and 2000 - has been “leading the charge” with a steady year-on-year price performance increase.

Lightstone’s findings show…

Sectional Title

Sectional Title sales of properties aged 30 to 39 years outperformed other age bands of properties in terms of average property growth per year, at 4.7%.

This is followed by units aged 20-29 years showing an average growth of 4.2% per year, over the last 10 years.

In the last five years alone, the 30-39 age band of sectional title properties that sold realised an average of 29% compared to 22% for the 20-29-year-old sectional units.

“Midrand and Modderfontein dominated as the most popular areas in terms of volume of 5-year-old properties that have sold in the last five years, which would make sense considering the level of commercial, industrial and residential growth within these geographic parameters.”

Interestingly, Lightstone notes that single females are buying more sectional title properties older than 10 years compared to single males or couples - married or not.

Freehold Property

“In the Freehold market, we see Generation Z of the property market cannibalise market share from the 10- to 19-year-old properties with an average growth of 5.4% over the last 10 years.”

KwaZulu-Natal specifically shows that 50% of all freehold properties sold in 2019 were 20-29 years old, according to the report.

“Surprisingly, in this segment of property sales, even aged properties of between 30 to 40 years plus have shown steady growth in the last 10 years, which could possibly be associated with the idea that property refurbishment and renovations increase property value.”
Again, single females dominated in freehold property sales for new properties.

Estate property

Looking at Estate property sales, Lightstone notes it’s no surprise to see that sales fall mostly within the 1- to 19-year age gap, with retirement developments and mature lifestyle estates dominating the list as far as sales volumes of properties under 5-years-old goes.

Three of the Midstream-branded estates appeared in the top ten performers in estate sales.

“Interestingly, estate sales for the 5- to 9-year-old properties were at the highest from 2012 to 2015, but have subsequently been overtaken by sales in the 10- to 19-year-age band, with married couples dominating the sales in this segment of the market.”

“This is also due to estates being a fairly recent phenomenon in the property market back in 2009 – hence why new props dominated, and now older props are dominating sales.”

Finally

“It’s been really interesting to see how the variation in property ages affects sales and how these ages don’t necessarily meet the associated perceptions,” says Esteani Marx from Lightstone. “Properties bought and registered in the last 19 years most definitely take the top spot in estate sales, however, the surprising contender was how properties that are 20- to 30-years-old continue to show promising growth year-on-year – a comforting thought in an economic climate that has had such a volatile effect on the property industry.”

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