Small apartments show big growth in 2011
Whereas most property types have shown a relatively modest improvement in price growth in the first quarter of 2011, one segment should really make investors sit up and take notice, recording a year-on-year price growth of 6.6%.
According to FNB Property Strategist John Loos in a recently published review of segment price trends, the ‘Sectional Title Less than 2 Bedroom’ sub-segment has completely out-performed all others by a significant margin.
“Whereas, the Sectional Title 3 Bedroom sub-segment recorded a meagre 0.3% year-on-year price growth in the 1st quarter, and the 2 Bedroom sub-segment 0.4%, the ‘Sectional Title Less than 2 Bedroom’ sub-segment showed a significantly better 6.6% growth, and was the only major segment in both the full title and sectional title markets to see its growth accelerate, from the previous quarter’s 4.8%,” Loos wrote in the FNB Property Barometer of April 2011.
“This segment is believed to be a major target of first time buyers in the former white suburban areas,” Loos observed. “Our FNB Estate Agent Survey shows an increase in first time buyers as a percentage of total buyers from 17% in the 4th quarter of 2010 to 22% in the 1st quarter of 2011.”
More first time buyers entering the market is without question a very healthy sign for the gradually recovering South African property market, and will no doubt have a knock-on effect that will drive house price growth upwards in all segments of the market.