Affordability, convenience and security are the key factors
driving a distinct buyer preference at the moment for smaller homes packed with
“green” features and “smart” technologies.
That’s the word from, SA’s
biggest bond originator, who says that affordability remains a serious concern
for most buyers because they are still labouring under relatively heavy debt
loads and worried about rising taxes and the increasing cost of food, fuel and
utilities. “SA consumers are much more conservative spenders than they used to
be and really careful now about getting in over their heads.
“Consequently, while the banks are keen to lend to
homebuyers and our bond approval rate is at 80%, the highest level since the
2008/ 09 financial crash, the latest statistics from Absa show that the total
of outstanding household mortgage balances is currently growing more slowly
than it did last year. The year-on-year growth rate is down from 3,6% in
November 2017 to 3,1% currently.”
This does not mean, he says, that South Africans are buying
fewer homes – only that they are buying less expensive homes. “This is
confirmed by our own statistics*, which show that more than three-quarters
(78%) of the bonds granted in the past 12 months have been for less than R1,5m
– and that 60% were actually for less than R1m.
“In general terms, these cheaper homes are also smaller, as
indicated by recent FNB research showing that the average size of new homes
being built in SA has shrunk from a peak of 203sqm in 1974 to around 162sqm now
– and that accounts in large measure for the current slow growth in home prices
(2,9% year-on-year) in spite of a drop in the prime interest rate and increased
sales volumes.”
However, Botha says, affordability is not the only reason
for the increased popularity of smaller, cheaper homes. “Changing lifestyles
also play a big role. Household sizes are shrinking, for example, so buyers
generally need fewer bedrooms. Many homeowners now are also short of time so
don’t want a large garden or home to maintain. Traffic congestion is also
driving a significant shift from the large homes of the suburbs to smaller
homes in urban centres.
“In the SA context it must be said that smaller properties
are usually also easier and less expensive to secure, and the effect of this
concern can clearly be seen not only in the increasing number of estate
developments, but also in the steady growth of Sectional Title in SA over the past
30 years. In the late 1980s, secure sectional title developments accounted for
only 6% of new builds in the country, but today they account for 27% of all new
homes.”
The quest for greater security and personal safety, he says,
is also one of the main factors driving the current rapid uptake of “smart”
home technologies in SA. “Using these technologies, owners can monitor their
alarm systems and security cameras via their smart-phones even when they are
not at home, photograph any intruders, open or close garage doors and gates,
and turn lights on and off to make it seem as though there is someone at
home.
“This is definitely appealing to SA homeowners and according
to Statista, the overall value of the smart home automation market in SA is
expected to top US$60m by 2020. Meanwhile, there is already sufficient demand
for local security companies such as Fidelity ADT to have introduced
security-focused smart home packages.”
And finally, says Botha, the trend towards smaller homes is
being driven by a growing awareness among SA homebuyers of what it costs in
environmental terms to run a larger home. “Cape Town residents have seen, for
example, how much water can be saved just through more conscious usage, while
the threat of renewed rolling blackouts this winter is causing many others to
revisit the drawbacks of electricity derived from fossil fuels.
“As a result there is rising demand for smaller homes that
use less energy and water and are already fitted with ‘green’ equipment such as
heat pumps, solar panels and rainwater tanks. And some of the banks now even
have special home loan options for owners who want to retrofit such ‘green’
systems, because doing so definitely adds value to their properties.”
Anne-Marie Bamber is Norgarb Properties dedicated Home Loans Consultant. She has over 15 years’ experience in assisting clients with their Home Loan needs and has placed many happy families in their dream homes.
Contact her today for no cost stress-free home-buying.
Anne-Marie Bamber
Home Loans consultant
Tel: +27 (0)21 851 3568 | Fax: +27 (0)21 441 1494 | Cell: +27 (0)82 071 1665
E-mail: anne-marie.bamber@betterlife.co.za
Contact her today for no cost stress-free home-buying.
Anne-Marie Bamber
Home Loans consultant
Tel: +27 (0)21 851 3568 | Fax: +27 (0)21 441 1494 | Cell: +27 (0)82 071 1665
E-mail: anne-marie.bamber@betterlife.co.za