Estate living in South Africa has shown a steady increase over the past decade, highlighting its popularity as an asset class. There are some interesting reasons for this phenomenon; let’s review some of the reasons why estate living has become so popular and why there is an increase in the development of estates.

Growth of estates in different geographical areas   

Although estates are increasingly popular, they are not necessarily equally popular in all provinces. Provinces such as Gauteng and KwaZulu Natal have many more estates than the Western Cape; this may be related to the factor of available land but we are seeing that semigration to the Western Cape is having a significant impact on the property landscape. For that reason, farmlands on the outskirts of Cape Town in areas such as Paarl are in high demand due to the demand for estate development in those areas.

Sectional title living versus estate living

The volume of sectional title developments continues to overshadow estate developments because of the cheaper building costs versus those of estates. Estate development requires a significant capital investment along with the need for a sizeable piece of land, compared to sectional title schemes that are feasible even on only a small piece of land.

Naturally, the appeal in estate developments is due to the much higher return on investment for the developer and a superior product to that of a sectional title unit. Owners in estates choose to pay more for their property because of the added benefits of the estate – such as security, far more space, facilities, and the quality of the property.

Safer environment

As a result of the high rate of crime in South Africa, some owners of free-standing houses and sectional title units are electing to move to estates for the additional layer of security that an estate typically offers. Security is one of the most outstanding features of estate living, making it particularly attractive in a country with high levels of crime.

Older people moving into estates

We know that older people tend to scale down when their children leave the home. It is then that they want to simplify their homes and have an added layer of security if they can afford it – at this point, estate living becomes a very attractive option. Although levies are paid to the homeowners’ association (HOA) for certain costs to the common property, the general costs of living in estates are less than the cost of owning a freehold property.

Some couples opt to moving into an estate when they have children, where they can benefit from a safer living environment which often includes more space, play areas for children, and proximity to schools and shops.

Primary and secondary properties

For some couples, moving to an estate constitutes an upgrade of their living environment when they move from a sectional title scheme to an estate. If they choose to retain their sectional title unit, it becomes an income-producing asset which they may use to house their university attending children (if nearby) and with the added benefit of the ability to write off any expenses against their annual tax returns.

Summary

Living in an estate provides many benefits to those who can afford to own a property in such a development. As people become older, or earn more and/or have children, the appeal of living in an estate increase. Some areas in South Africa have many estates to choose from while others have less or are only starting to see an increase in these kinds of developments.

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