According to a recent press release from Lightstone, property located in security estates is valued at about three times more than normal freehold property.
The national average cost for a property in South Africa last year was R700 000, whereas the average price within an estate was R2 million.
When looking at a breakdown of estate property in 2016, 9.9% were worth over R3 million, 29.7% were priced between R1.5 million and R3 million, while the rest were valued at between R1 million and R1.5 million.
Lightstone’s recent release states that estate living in South Africa is definitely on the rise, not only because of the heightened level of security offered, but also because estates are excellent investments and because developers are increasingly including lifestyle elements like golfing and fishing and even schools and hospitals.
“Although luxury-market buyers are under pressure, the estate-housing market in general doesn’t dip as low or peak as high as the rest of the luxury market and we therefore expect it to outperform this segment during the current downturn”, concludes the report.
The report names Cloud’s End in Sandton as the most expensive estate in Gauteng with a median property value of R18.2 million. This is followed by Les Maisons on Fifth in Hyde Park (R15.7 million), 108 Mount Street in Bryanston (R15.3 million), Villa Fiori in Morningside (R14.7 million), Central Park in Houghton Estate (R12.3 million) and Blair Atholl close to Lanseria with a median price of R11.2 million.
Seeff asked some of their licensees in Gauteng to share their thoughts on estate living in this province:
Charles Vining from Seeff Sandton says they have a number of estates within their trading area which includes lifestyle estates, retirement villages, equestrian estates, golf estates and eco estates. In fact, Fourways Gardens, which is in the Fourways part of their trading area, was the first ‘estate’ in Johannesburg.
“Pricing is generally higher in gated communities than in surrounding ‘open’ suburbs because buyers know they are not only buying bricks and mortar, but also a lifestyle, the upkeep of common areas (and a golf course in some instances), as well as for security“.
Security is incidentally one of the driving factors influencing purchases in estates. That being said, the price of properties within the same estate can differ greatly, depending on the erf size, position within the estate itself, the size of the dwelling and the finishes.
“Pricing in an estate tends to increase steadily as homes are built, with prices reaching premium when little to no vacant stands remains in the estate available to buy to build on”.
“Vining concludes that estates are mostly found in suburbs further out of the Sandton and Johannesburg CBD, because large tracts of land are necessary to establish them. Fourways, Kyalami and surrounds are the predominant suburbs estates are located in”.
Chris Hajec, MD from Seeff Randburg, says around 22% of the housing stock throughout Randburg consists of a wide range of estates.s
“Property in estates represents 18% of the total units sold in Randburg in the past year, but nearly 26% of the rand value“.
Estates will continue to grow in terms of the overall percentage of housing stock in Randburg for several reasons, not the least of which is the popularity of this type of living. Randburg still has numerous expansive areas to the north which lend themselves to any size residential estate development.
Popularity among developers for these areas stems from the fact that land tends to be more affordable than in Sandton.
“The vast majority of estate properties in Randburg are sold between R1,150,000 and R2,075,000 and all new construction of estate developments are in that same affordable price range”.
Hajec adds while there is certainly an element to estate living which generates historical notions of luxury and privilege when considering estates like Dainfern and Eagle Canyon for example, the reality is that the concept of “estates” has metamorphosed into a much broader and generalized concept in response to an increasing insecurity around one’s safety in freehold properties.
Hajec concludes that the most expensive estates in Randburg include Waterval and Brooklands with prices as high as R10 million, while the more affordable estates include homes in the R600 000 to R1 million range.
Suzanne Ridolfi, Seeff’s licensee in Southcrest, Alberton says about 5% of homes in this area are located in estates.
“There is a huge demand for estate properties and the trend will continue as more people are opting for security and a better quality living“.
The statistics of crime in the suburbs have not shown any downward curve and this is fuelling the demand.
Estate living is no longer reserved for only affluent buyers and we see many middle class, hardworking families buying in estates. In general people are prepared to pay higher prices and added levies for peace of mind, even though they can technically get much more bang for their buck in the suburbs.
Ridolfi concludes that the most expensive estates in their area include Meyersdal Eco Estate where property is priced from R8 million up to R30 million, Meyersdal Crest Estate where prices range from R3.5 million up to R 5 million and Meyersdal Nature Estate where property is priced from R5 million up to R10 million.
“In the Eye of Africa a full title property is averaging R 5.5 million, while sectional title units and clusters here average R 2.7 Million. In Farmhouse Village in Alberante, full title properties average R 4.5 Million and smaller estates like Laborie, Rubicon, Fairview Village and Leopard Rock Estate in Southcrest offer full title properties for R 2.5 million“.
Steve van Wyk, Seeff’s MD in Centurion, says that about 20% of property in Centurion is located in 60 security estates.
“While there are very expensive estates like Cornwall Hill where homes are priced up to R30 million, there are options in every price range and homes in some are priced from as low as R1.5 million“.
Demand for estate living in Centurion is exceptionally high because of the security factor, but also because of a better resale value in general, walking path areas, play areas, gyms, golf courses, tennis and squash courts, churches, schools, pools and restaurants.
Gerhard van der Linde, MD from Seeff Pretoria East, says that here buyers are equally willing to pay a premium for homes in security estates and that the vast majority of new developments in this area are now gated communities with the main emphasis on security.
Van der Linde continues that the most prestigious estates in Pretoria East are Silver Lakes, Mooikloof and Woodhill with respective median prices of around R3.5 million, R6 million and R5.6 million.
“The face of estates has changed significantly in recent years and they now come in many shapes, sizes and price ranges. Pretoria East is no exception and also has something available in every range“.
Estates in the very affordable price range, with emphasis on sectional title units, include Mooikloof Ridge with an average selling price of R750 000. In Savanah country estate property cost R2 million on average, Silver Willows in Equestria has an average price of R1.4 million and the estates surrounding Silver Lakes are all in the R3 million to R 5 million price range”.
David Ingle, Seeff’s MD in Edenvale/Bedfordview, says while many other areas in Gauteng have a substantial number of estates, only about 8% of property in their area is located in estates. They do however have large developable zones that are ideally suited for lifestyle estates and are good opportunity for developers.
“The trend towards secure lockup and go lifestyle estates is a desirable upward trend that has been with us for the last 20 years and purchasers looking for security inside lifestyle estates and large sectional title complexes continue to increase“.
The large majority of buyers are looking for homes in this type of environment first, but due to the lack of availability or affordability, have to settle for purchasing in the traditional freehold suburbs instead.
While developers are responding to needs across all price bands, challenges exist in providing proper security and facilities within estates for the lower end of the affordability band. In Bedfordview and Edenvale there is not enough affordable land available to satisfy the need for this type of product”.
Ingle concludes that the most expensive estates here include Bushwillow Park and Thorn Valley Estates in Greenstone Hill where prices range from R2 million to R6 million and the most affordable estate would be Pebble Creek in Greenstone Hill where prices range from R800 000 for an apartment to R4 000 000 for a home.
While many would like to purchase property in estates, affordability probably remains the biggest challenge even despite the availability of lower price ranges.
Small erf sizes and strict rules from the homeowners associations also deter people from estate living, but in general Seeff licensees agree that the overwhelming majority of South Africans would probably choose to live in estates if it weren’t for these factors.
While alternatives like boomed off areas could offer slightly better security and enhanced peace of mind, they are poor substitutes for a genuine security estate that is manned 24 hours a day and has access control. And this is the main reason why estate living in South Africa will continue to grow in popularity.