More and more South Africans are steering towards these homes and are willing to pay up to three times the national average, in exchange for a better quality, safer and family focussed lifestyle. As with any market, increased demand is usually beneficial as it tends to create greater consumer choice, but for residential estate management and developers the result is quite the opposite. Most of these estates run in accordance to the Companies Act, and like any business, the increase of healthy but fierce competition can be concerning.
A few years ago, prices for homes on an estate would have been determined by their sought after facilities, such as state of the art security, access to a golf course and a private onsite school facility.
However, today, there has been a dramatic shift in the market and one just need to glance through the New World Wealth 2015 report of the top ten residential estates in South Africa to see that most now all have very similar offerings, meaning house prices are now being determined by location, demand and investment potential.
The majority of private estates and gated communities are situated in some of the most stunning environments that South Africa has to offer, like Somerset West, Paarl and Stellenbosch in the Western Cape for example, so location is pretty much covered. But the relationship between demand and investment potential is a little trickier, being directly linked to an estate’s brand value.
Brand value is based on the concept, that the owner of a well-known brand name can generate more, as consumers believe it has a higher value than less well-known products. Brand value in the residential estate sector is crucial as the battle for market presence intensifies. Those estates that want to remain in a dominant market positions and develop a credible and long lasting consumer presence to set them apart from the 599 other competitors need to take head from the likes of formidable brands like Google, Nestlé and Apple, who have spent years and millions building their iconic brands.
A mark of distinction, a strong and successful brand value based on world class amenities permits residents and management to enjoy the benefits of superior property values. It’s why the likes of Eagle Canyon, Pearl Valley and the newly launched Steyn City Resort can sell properties valued at up to R25m in some cases.
With the assistance of industry specific resource platforms such as Estate Living, they’re successfully building their brand, which in turn will become their most treasured asset, promising consumers a lifestyle like no other. And when things go wrong (in this sector that usually means breaches in security), it is the strength of their brand and brand loyalty, which can help them sail through murky waters, effortlessly.
Our unforgiving crime rates are one of the main reasons why the number of residential, golf, wine, polo, and equestrian and retirement estates in South Africa continues to expand, so much so that there is now even an association (The Association of Residential Communities) governing the interests of home-owner associations, bodies corporate and management to harness nurture and strengthen the sector, which has some of the best estates in the world.
The need to establish a visible and influential presence has never been greater in ensuring profitability and longevity in this aggressive industry, if we are ever to maintain these world class standards.
http://www.bizcommunity.com/Article/196/568/132746.html – Bizcommunity
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