There has been an increase in approved home loans for new residential developments, says ooba Home Loans who has reported a 117% increase year-on year (up from 6.89% in October 2021 to 14.99% in September 2022).
2022 proved to be a busy year for property developers within ooba’s sales territories nationally, with key growth in the Western Cape, followed by KwaZulu-Natal and the greater Pretoria area.
“Overall, our statistics show that every region, with the exception of Limpopo and Mpumalanga, saw a greater number of new developments breaking ground in 2022 versus 2021,” says ooba Group CEO, Rhys Dyer.
“The key factors driving the demand for lock-up-and-go properties such as these are linked to stock shortages of affordable free-hold homes in sought-after areas and the reduced costs of buying into a new development due to zero transfer duties, plus the benefits housing developments can offer buyers … Homebuyers are also attracted to the convenience and luxury of on-site amenities such as gyms, swimming pools, restaurants and kiosks, the enhanced safety and security, as well as the prospect of being surrounded by a community.”
According to Dyer, the KwaZulu-Natal region has shown remarkable growth over the past year, with a 1220% increase in bonds for homes in new developments. “This preference for homes within residential developments may be linked to an increased desire for security in the wake of the July 2021 riots in the province, which left many feeling uneasy at the prospect of living in freehold homes without neighbours close by.”
The abundance of new residential developments in this region is another contributor to the uptick in bond applications. Many of these developments are in ‘lifestyle estates’ all located in the sought-after KwaZulu-Natal North Coast area.
Lightstone data indicates that the number of new residential developments located in estates is increasing on a national level – from 13.6% in 2018 to 15.8% in 2021.
“Many of the homebuyers of newly-built homes in lifestyle estates are semigrators: buyers who have relocated from in-land metropolitan areas to the coast and countryside in search of a more relaxed lifestyle,” he concludes.