Demand for sectional title properties in Cape Town

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Cape Town sectional title property in demand

Q What is the state of the sectional title market in Cape Town?
The surge in demand for sectional title properties in Cape Town experienced in 2014 is set to continue this year. Now is a good time to purchase property in Cape Town, as the sector is experiencing an upswing and is nowhere near slowing down. Cape Town is heading towards a property boom with prices continuing to increase by about 5 – 10% per annum in the next few years.

Q What are the contributing factors for the increase in sectional title dwellers in the CBD?
Contributing factors to the increase in sectional title dwellers in the Central Business District (CBD) include increased traffic congestion leading to longer travel time into the CBD from the suburbs, convenience and 24-hour security, which most apartment blocks in the CBD and Cape Town area offer.

Q How does the boom in the rental market affect property owners and landlords?
Sectional title properties in the CBD area and surrounding suburbs are being sold and let out quicker than ever before. According to the Cape Town Central City Improvement District’s (CCID) 2014 Residential Survey, residential property investors provide half the accommodation in Cape Town’s city centre.
As a result of the demand, property owners have been cashing in on the booming rental accommodation market and will continue to do so this year. This demand is allowing them to maximize the charge of rentals to tenants.

Ian Slot Managing Director, Seeff Properties, Atlantic Seaboard and City Bowl, Cape Town 
A few years ago visionary investors redeveloped older buildings in Cape Town’s City Bowl. Now, after an initial slow start, demand exceeds supply by quite a wide margin, opening up further development opportunities. For example, converting the older C-grade office buildings into residential and mix-use complexes.

Dr Andrew Golding, CEO, Pam Golding Properties 
Mouille Point’s average achieved value in rand per m2 increased by 532 % in total, or 14 % per annum, from about R4 600 to R29 070 per m2 over 14 years (2000-2014). This has escalated further to a current average of R45 000 to R50 000.

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It is no surprise that recent reports suggest that the average price of Cape Town Sectional
Title property is now at around R1.5m which is significantly more than the R800 000 for the
Johannesburg metro.

Besides the Cape Town property market gaining remarkable ground and becoming a
favourable region for both local and foreign property buyers the allure of Sectional Title
ownership has been on the increase over the past few years.

There are a number of reasons for this and most notably it is the security and comfort
Sectional Title ownership and living offers. Living in a community has become a prerequisite
for many people buying in South Africa.

Sectional Title units are often more affordable than free hold properties without having to
compromise on affordability or lifestyle. A family hoping to purchase a property with three
bedrooms in a safer more family orientated suburb might be able to do so far easier by
buying into Sectional Title than by buying a Full Title home. The demand for these
properties makes financial sense as the promise of a return when selling on is in your

Another attraction for buyers looking into Investment Sectional Title schemes is the pooling of general
maintenance and municipal costs (not including the rates cost) in respect of the common
As with any Property investment in South Africa, it is imperative that potential buyers understand the precautions
they must take when purchasing sectional title property. The first thing you need to take
cognisance of is that when buying a Sectional Title unit it is important to deal with an agent
who specialises in Sectional Title sales and who understands the product on offer. It is also
important to note that when buying into Sectional Title the stability and future viability of
the Scheme is unquestionably linked to the involvement of the Trustees and the quality and
professionalism of the managing agent.
Sectional Title units will continue to become more popular among buyers of South African
property in the future and is likely to provide a good return on investment for discerning investors.

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