SA Leaning Towards International Property Trends

High Rise Here We Come

An interesting article published on iafrica.com has drawn attention to the international trend towards high-rise living and how this seems to be playing out in South Africa. It seems that despite efforts made by developers to promote the sales of apartments like those in Melrose Arch in Sandton and the Point area in Durban, South Africa has a long way to go before it reaches the same popularity as high-rise living enjoys in London and New York.

According to Mike Bester, CEO of Realty1 International Property Group, “This type of lifestyle could become very important in the future if we look at the rising costs of land and building”. Statistically, ABSA’s report on property trends in luxury housing released in May 2007 showed that population density increased by 89.4% in the country’s metropolitan areas during the period 1996 to 2005, while only increasing 33% in rural areas.

Bester explains that, “This kind of pressure means higher numbers of people looking for housing in urban areas and although the current occupants of flats are more likely to be lower income individuals who can’t afford better accommodation, we’re seeing this starting to change with the increased supply of luxury apartments coming onto the market”.

High-rise apartment complexes, such as Melrose Arch in Sandton and the New Ponte in Hillbrow, generally offer residents a variety of added benefits, from gyms on-site, to restaurants and shopping facilities, as well as the all-important 24 hour security and parking facilities.

Richard Goller, a former editor of the Sunday Times magazine and now freelancing in London, says that he lived in a high-rise apartment in central Johannesburg by choice. “I’ve always loved the idea of the apartment lifestyle – chic and convenient,” he says. “The amenities in the building were great and the apartment itself was a good investment”.

Goller believes that a city like Johannesburg, with its huge population growth and ever-increasing problems of urban sprawl will no doubt follow international trends. “If there is sensible urban planning, it means more people per square kilometre which means more high-rise apartments,” he says.

Bester tends to agree with Goller, “This form of housing could certainly help to alleviate the pressure on the urban areas. And with the traffic problems and the cost of fuel unlikely to reduce substantially in the long term, people want to cut their traveling time and expenses,” he says. “What better way to do this than to live close to your place of work?” Bester believes that a rising trend amongst the more affluent South African families seems to be in line with living close to the city during the week and having a home further out where the family can disappear to over weekends.

Bester’s theory is certainly based on recorded sales of high-rise apartments. In June last year, a newly converted high-rise block in Durban (the Berea Lofts) sold out all 133 units, which included 3 glass-fronted penthouse apartments within days of release. The ultra luxurious and expensive Nedbank La Residence in Sandton recently changed plans in favour of using the space for offices, but had sold half of its 152 units at the time of cancellation for up to R40 000 per square metre.

Having said this though, the new luxury apartments in Durban’s revitalized Point area haven’t done quite so well. The reason for this lack of success seems to be the surroundings, which appear to be discouraging the buyers. Bester explains, “It’s difficult to consider buying a R1,2 million apartment in a secure block if you have to run the gauntlet of drug dealers, pimps and prostitutes to get to the building”.

When asked how high-rise living in South Africa currently compares with that in London, Goller answered, “Well, apartment lifestyles are still cheaper in South Africa when it comes to property, but in London you get a different kind of value: security and being at the centre of things”. Bester goes on to say that, “While luxury high-rise living may well be the way of the future for many South Africans, it’s going to take a while before we start to view ‘flat life’ as a viable alternative lifestyle to an upmarket sectional title unit”.

The information in this article is courtesy of iafrica.com (“The way of the future”, 10 September 2008).

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