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The way we live has changed so dramatically in the past few years that disruption is becoming the norm. Property ownership is no longer viewed as a giant step into adulthood and a promise of financial security. Bricks, mortar, a level of security and some pretty landscaping in a desirable location no longer cuts it.
The definition of a home is changing, and while developers themselves are often the innovators and disruptors in the industry, accurately defining your target and positioning your estate correctly in the market is the key to success in this new era.
Location, location, location
Urban or rural, suburbs or city, up-and-coming area, or established node?
On the right side of the tracks with decent views was a winning formula in the past. Today, with land in short supply, location has become extremely nuanced and it plays a huge role in positioning. Second-tier cities are a growing market as renters semigrate from the major cities looking to buy for the first time. Urban renewal offers prime locations for mixed-use precincts, and residential and retail opportunities abound close to airports and industrial hubs.
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Ambitious mini-city developments in suburban nodes and retirement villages close to hospitals and amenities meet the rising demand for accessibility and convenience, and any development near a university is a winner as student residences at all South African universities fall way short of the accommodation needs.
There will always be a demand for the tranquillity of country living. While this is generally only available to the shrinking high-end market, recent tourism growth attributed to the abolishing of unabridged birth certificates, coupled with the new direct flights implemented between New York and Cape Town, and Durban and London, makes the potential for an increase in investor buyers look promising.
The green factor
Energy efficiency is fast becoming the norm, and any new development should be designed to incorporate renewable energy sources, water harvesting, recycling and waste management systems, veggie gardens, permeable surfaces, and even alternative building materials.
A low carbon footprint is the only way forward, and such developments are proving to be leaner and more sustainable to run, providing considerable long-term savings and benefits.
Ultimately, it’s all about people
People are complex, and while security, affordability and convenience are common requirements across all generations and markets, a deep understanding of the very different needs of markets is vital to getting your positioning spot on – from the emerging millennial and generation Z buyer at one end to active retirees or the frail and elderly at the other end of the spectrum.
Space has always been seen as a plus, but the trend towards minimalism is gaining traction across all generations, and the rise of the single buyer adds to the growing number of home owners who value compact, creative designs, and communal co-working and leisure space.
Technology-driven developments that incorporate live, work and play are already popular in and around the big cities. This model could do well if effectively adapted to meet the needs of the huge market for affordable housing.
Eventually it all comes down to economics
Money is tight but this does not mean that the market is shrinking – it’s just changing, and flexibility could be the winning formula of the future.
Multiple-price entry points are a trend to watch as the affordable housing market is booming thanks to the FLISP Subsidy. Young first-time buyers in the R750,000 to R1.5 million bracket are keen on fractional ownership. Life rights appeal to older retirees, while sectional title, rent to buy, freehold ownership and leased corporate or retail space are all key components in the economic positioning of your estate.
The future is now
For developers, the opportunities are limitless. In order to survive in this new market, estates and developers will need to embrace the new property landscape with bold, creative designs, a green ethos and flexible purchase and rental models.
