While this year has been exceptionally hard for the local commercial property sector, the residential property development sector has reason to be optimistic for 2021 says Harold Spies, founder of residential property development company, Similan. This includes the opportunity in the upcoming municipal elections to stand together for effective local governments who will attract more housing investment.
Similan creates sustainable residential developments for the emerging middle-class market. “Building a better South Africa is a dream which can only be realized by a concerted effort by all of us. We are indeed stronger together but then we all have to do our part and hold each other accountable; as the private sector, government and citizens.”
Spies says that housing has the potential to have an impact on people in many ways: “Housing development activates professional teams, contractors and community leaders. It leads to big infrastructure development and maintenance, as well as the opportunity to create new neighbourhoods and partnerships. It mobilizes capital and communities, and it can help to move people up socially and financially.”
As a property developer, Spies is still optimistic about the future of business in South Africa. In addition to the great need for housing, there is a dream among every generation to improve their lives, which includes having safe, quality homes in secure neighbourhoods he says.
“South Africa is ahead of the global curve for urbanization which means that there is a massive demand for housing. That is a challenge and an opportunity for property developers and local governments.”
Although Covid-19 related restrictions have a massive impact, Build-to-Rent (BTR) is still a growing asset class internationally and Similan has learnt quickly how to live with it and to manage the impact.
“We used the opportunity to recognize that people make changes to adapt to the economic impact or changes in their lifestyles. We can offer quality homes to suit different requirements as some people have to downsize, rent or work from home.”
Spies says the low interest rate has brought an opportunity for some people to buy rather than rent homes where they may be able to even to work from home.
The importance of working closely and effectively with local governments to attract investors and to build quality, affordable houses cannot be overestimated. Taking a holistic and long-term view for every development from consultancy, planning, development, and marketing to managing these properties, Similan carefully selects the areas for new developments to manage risks such as the potential of failing infrastructure, poor service delivery or unnecessary delays.
Unfortunately, building plans can take up to eighteen months to be approved for some developments. “A competent government structure is crucial for what we have to do to provide affordable, sustainable residential properties across South Africa. If there is a lack of capacity or incompetence in government, especially municipalities, we are unable to proceed, which has a massive influence on developments and addressing the need for quality housing.”
Spies started Similan ten years ago to change the face of affordable housing. “We believe that lower-cost houses do not have to look cheap. Affordable luxury is achievable. After a decade dedicated to making an impact through housing development, we continue to ask ourselves how people want to live. We want to build affordable homes and create spaces to suit their needs for a quality lifestyle now and in the future.”
Spies says the 2021 municipal elections will be an opportunity for South Africans from all spheres to insist on effective local government structures which are essential for future investment in housing development. He says voters must understand that it is not so much about the parties they vote for but the power to get competent people working together effectively in their municipality for future investment and growth.