In South Africa, luxury is still associated with large yards and proportionally large property sizes but with the increase in population densities in metro areas, residential apartments might become a more feasible living option.
In Sandton, for example, the average freehold property is valued at approximately 150% more than a sectional title property.
"Even though the amount of bedrooms and bathrooms in these two types of properties generally differ, we expect a large portion of the price difference to remain when comparing like-for-like properties due to sought-after luxuries like a big lawn, a swimming pool and solitude that is generally associated with luxury freehold properties," says Hayley Ivins Downes, Head of Property at Lightstone.
A two bedroom house with a small yard of less than 900m2 will only cost about 10% more than a two bedroom flat or apartment if you are looking to live in a relatively sparsely populated area. Moving to a more densely populated area increases this premium to about 20% but can reach as high as 40% in towns like Sandton and Randburg.
A larger yard of between 900m2 and 1600m2 is going to cost a lot more regardless of how many bedrooms are needed. Moving from a two bedroom apartment to a two bedroom house with a larger yard will in general cost no less than twice as much, while a three bedroom house will cost about 45% more than its sectional title counterpart.
"A good potential buy if you're not house-hunting in one of South Africa's luxury suburbs, is a freehold property with a smaller yard. Freehold houses with three bedrooms and a yard smaller than 900m²2 will cost almost the same as a sectional title but with the added benefit the yard brings," explains Ivins Downes.
