The chairman of Rawson Properties, Bill Rawson, has drawn the attention of buy-to-rent investors to the fact that the latest FNB property survey, compiled by the bank’s respected economist, John Loos, has shown that sectional title units have recently been far and away the best performers in the residential housing sector.
"The FNB report," said Rawson, "shows that in both the fourth quarter of last year and the first quarter of this year, sectional title units sold faster and saw greater price rises than any other sector. Those units with less than two bedrooms did particularly well, showing a 6.6 percent price rise in the first quarter of this year. No other segment of the property market has equalled that kind of increase recently."
Rawson Properties’ development company, said Rawson, had identified this trend two or three years ago and since then has only built sectional title units. They are currently bringing 416 units to the market in the Rondebosch and Grassy Park areas at prices ranging from R750 000 to R2.2-million.
Rawson said that his franchisees’ experience in the selling of sectional title property is that the major reasons for their popularity, apart from affordability, are the additional security such homes offer and the fact that most are well positioned in relation to work areas and to public transport.
"People will now pay a 20 percent premium – or more – for security and an even higher premium for being able to cut down travel time even if this means opting for a smaller, less comfortable unit," he said.
John Loos, the FNB economist, said Rawson, has pointed out that the rise in first time homebuyers (now 22 percent of all sectional title buyers) has been a big reason for the success of this sector.
"Again, we at Rawsons would agree with this but it has to be added that it is extremely difficult today to meet the cost limits set for first time homebuyers, particularly if the land is in a popular precinct, reasonably close to the city and has already been rezoned.
"As Sean McCauley, our northern region director, has said, a broadening of the base applicable to first time buyers, but keeping it limited to the affordable sector, would be very welcome indeed."