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Staff Writer

South Africa sectional title prices surpass freehold for first time in 20 years




In Q4 of 2023, sectional title residential property prices saw a notable increase, outpacing freehold prices for the first time in two decades, according to Dr. Andrew Golding, CEO of the Pam Golding Property group.


Dr. Golding noted that while freehold house prices have typically experienced higher growth rates than sectional title homes, a rebound in the fourth quarter of 2023 resulted in sectional title properties achieving stronger growth (+1.8%) compared to freehold homes (+1.5%).


This marks the first time since 2004 that sectional title house price inflation surpassed that of freehold properties. The trend continued to widen, with sectional title prices growing by +1.9% and freehold prices by 1.1% in December 2023.


The demand for sectional title properties has also risen significantly over the past decade, accounting for over half of all residential property sales in 2023 compared to less than 45% in 2013.


Notably, Tshwane saw the largest percentage of sectional homes sold last year, while Cape Town experienced a notable increase in sectional title sales due to investment purchases and new developments.





Dr. Golding attributed the increasing demand for sectional title properties to factors such as affordability, security, lifestyle preferences, and densification initiatives by municipalities.


Furthermore, data from ooba Home Loans revealed a clear preference for sectional title properties in investment purchases, accounting for 67.4% of all investment properties sold in 2023.





The average purchase price for sectional title units was R1.51 million, significantly lower than freehold properties, with Cape Town being an outlier due to its higher median sales price of R1.7 million.


Overall, while both two and three-bedroom freehold homes registered stronger growth in 2023 than sectional title properties, smaller units in both categories are currently experiencing an acceleration in house prices.

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