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GREENER-LIVING ON THE RISE

Factors fuelling the future of green living

Thursday 7th of June 2018

Early forecasts that sustainable-living will impact the future value of South African homes is bright. According to world building trend experts, as one of the globe’s earliest adopters of green building projects in the commercial space, there is growing anticipation that this trend will be a driver for South Africa’s 6.5 million unit housing market.

Results of a local first quarter (2018) survey by the Pam Golding Property group supports this notion with 70.3% of its agents estimating that homes with green features record a price premium of up to 5%, while 54.4% of agents stated that buyers are showing increased interest in green features.

According to Sandra Gordon, Pam Golding Properties’ senior research analyst, several factors are predicted to influence the future rise of green homes.

First-time buyers are a key driver

South Africa has a young population with about two thirds currently under the age of the typical first-time buyer, which is estimated at 34 years. Add to this that almost half of ooba’s new mortgages are to first-time buyers while Lightstone property data estimates that more than 90 000 new home owners are entering the housing market each year. Buyers in this category are likely to aim to reduce municipal costs for services such as electricity and water as much as possible, so their tendency will be towards green, energy saving homes.

Older, more affluent buyers also favour apartments

The demand for well-located apartments with low maintenance and reduced monthly running costs is not limited to first-time buyers. Faced with rising rates and utility costs, as well as security concerns, the appeal for a lock-up-and-go lifestyle for older, downscaling families, who are not necessarily wanting less-expensive properties, is growing.

Pam Golding Properties’ Atlantic Seaboard agents note that the majority of buyers of luxury apartments are older, more affluent residents moving from freehold properties to luxury apartments in the same area. They are simply attracted by the lifestyle that comes with apartment-living, but this comes with its own spin offs. The increased demand for apartment living across the board, as well as the rise of vehicle ownership through the emerging middle class, has resulted in growing congestion in metro cities

According to Gordon, home buyers are responding to the worsening congestion in a number of different ways: many are relocating to live-work-play growth nodes, security estates or locations near transport corridors, where new suburbs are becoming more attractive due to the extension of MyCiti and Gautrain routes.

Green precincts bridge commercial and residential markets

Currently, most available housing is freehold, but a growing demand for sectional title is outstripping available stock, and this demand is reflected in the proportion of building plan submissions for sectional title units.

“New developments in major growth nodes are increasingly mixed-use and include retail, office, residential and sometimes hospitality. This can be seen in Harbour Arch and Century City in Cape Town, Melrose Arch and Sandton Gate in Johannesburg, Menlyn Maine in Pretoria and also along the North Coast of KwaZulu-Natal.

“The positive result is that, as mixed-use developments gain traction with buyers, green design is extending beyond buildings into the public realm, with the creation of green precincts. In this way, South Africa’s lead in green building in the commercial sector is impacting positively on the new residential housing market,” says Gordon.

Green estates hold sporting appeal

Gordon says that according to Lightstone research, at least one in 10 South Africans choose gated communities when making residential property purchases. There are currently nearly 7 000 estates with 355 000 active residential properties valued at R800 billion in South Africa. Here too, the effects of the green transition are being felt.

Encouragingly, green estates are not limited to top-end eco-estates. In the affordable housing market, green estates are also available, with an emphasis on the potential savings on utility costs.

Fourleaf Estate in Port Elizabeth, the first fully EDGE certified residential development in Africa by the GBCSA, offers annual savings on utility bills of around R1 280. In addition to water and energy savings, the estate also encourages recycling and provides community food gardens.

Research indicates that there is a move away from traditional golf estates and a rise in demand for retirement and eco-estates. According to Pam Golding Properties agents, the most popular estates are those with amenities like golf courses, but also cycling routes, jogging paths and sports fields, thereby accommodating a range of interests, she says.

But is existing housing stock turning green?

During the past year, the majority of housing sales were existing homes rather than new housing units, says Gordon. She says that according to Gumtree’s Head of Property, Barrie Swart, the inclusion of green features is resulting in homes being sold or rented more quickly.

Keyword searches for borehole water and eco-estate steadily rose on Gumtree during 2016, and by November 2017, more than a thousand properties were promoted as eco-friendly, sustainable or eco-sensitive, which is double the number in previous years.

Costly utilities fuel green residential trend

“The anticipated growing cost of utilities coupled with electricity and water shedding increases the appeal for alternative, greener, more efficient sources of energy and water,” says Gordon.

For property owners considering how to effectively reduce their carbon footprint, The Know can recommend beginning with an onsite energy audit through an Enel X expert whose long-term energy-efficient solutions are said to be able to reduce electricity bills by 70%. Followed by the installation of a tailor-made power sun kit with electricity-producing photovoltaic solar panels that feed directly into the home’s main electricity supply. In addition, an Enel X online ‘app’ enables homeowners to keep an eye on their energy production and use. A solution for cloudy days or loading shedding through the use of Tesla batteries that store energy is also available, while financing this technology through GreenFin is also an option.

For a market-related valuation on your property, or if you are searching for a home with green features, call a Pam Golding Properties area specialist near you.

Posted by Niki Jackson