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First-time buyers driving sectional title market

Soho Junction perspective 5

Soho Junction in Broadacres, Johannesburg. 33% of first-time home buyers are opting for sectional title over freehold homes.

The overall demand for sectional title property has risen year-on-year by almost 7%. First-time homebuyers (FTBs) are driving the sectional title market, with 56% of all sectional titles applications received by bond originator, ooba, in the last 12 months coming from this market.

Statistics released by ooba show that 33% of FTB’s are currently opting to purchase a sectional title unit as opposed to freehold property, an increase of just over 6% year on year. “This indicates that there is a steady increase in demand for sectional title property by FTBs – primarily due to affordability,” said ooba CEO, Rhys Dyer. “Prices of sectional title units are generally cheaper than full-title homes and the running costs are lower. This is appealing to those eager to get their foot onto the first rung of the property ladder.”

The average age of the FTB buying a sectional title unit is 33 years, while the average age of this market buying a full-title property is 39. The age gap in the second-time homebuyer category is much smaller, with those acquiring a sectional title property being 42 years, compared to the average age of 43 years for those buying a full-title property.

SA’s national police service’s latest annual crime statistics show that there was a 5.2% increase in house robberies in the last year, with 20,281 robberies having taken place at residential premises.

“Sectional title complexes also generally offer the benefit of added security through, for example, access control, electric fencing, night and day-time guards, or improved neighbour vigilance. The advantage of living in a more secure community has also added to the increasing popularity of sectional title units among both FTBs and second-time homebuyers. The increased demand for sectional title units is expected to continue into 2016,” said Dyer.

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