Oct
2013
Densification is a brand new word and concept. This means urbanisation of land area.
This is nothing new. Cast your mind back to the 60's and 70's when apartment buildings were the norm, mostly for first time home owners. It was an affordable starter home. Hillbrow in Johannesburg's central business district used to be a sought after suburb for first time home owners. Sunnyside in the Pretoria CBD was another sough after area.
This trend we are currently seeing is just that, but in a different way. Densification and urbanisation has moved to suburbs as a result of the influx of emigrants occupying this affordable source of residence.
One such successful densification property project is Bedfordview. Underutilised property was "re-developed" and sold at a profit. The result is the injection of new growth prospects in Bedfordview, opening up the market for a different income group.
This "densification" is the result of people not wanting to spend all their time travelling to and from work. There are many benefits to this "new" trend - security, exclusivity and demand. Young married couples may not, at this young stage in their lives, feel like maintaining a garden, or the family has not been planned yet. The growth in this market segment is good due to the high demand, and the market is trying to catch up to this demand.
This densification trend is prevalent in coastal suburbs for both permanent- as well as holiday residents. In coastal towns this second property is an income, generating investment especially during "high-season" periods. Rents are high and the demand for seasonal rental property is very high. South Africa has three major holiday seasons and this makes for good average rental income.
There also is a trend for foreigners to rather invest in these coastal towns in the more upmarket suburbs. This influx in foreign investment is good for property prices but could also put more property out of reach for middle to lower income groups. Maybe this is the reason Mr Zuma is looking at a bill limiting foreigners purchasing property in South Africa.
Myroof has many properties listed in these specialist nodes. Don't miss out on it. Don't be adventurous, be money wise, interest rates are favourable and properties are well priced.
