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Monday Aug 14, 2017

Land scarcity leading to smaller and simpler housing

With a shortage of land for housing and an increasing need for urban densification - in the Western Cape in particular - average erven have almost halved in size over the past 40 years.

Data has shown that in Cape Town the average full title stand is currently less than half the size it used to be.

Today's homes also have fewer luxury features like swimming pools, garages and dining rooms, and building sizes have decreased. In addition, sectional title homes are far more common.

"This longer-term trend towards 'smaller and simpler' is set to continue," says FNB's household and property sector strategist John Loos in FNB's latest Property Barometer.

This is because in South Africa, with its general government fiscal constraints and low rates of economic infrastructure investment, there have been increasing land constraints.

From FNB's valuations data, in which valuers note the estimated building dates of properties, important information regarding sizes and characteristics of homes has been gleaned. And one of these is that the average full title stand size has shrunk.

Full title residential stands of homes built from 1970 to 1974 had an average peak size of 1063.4sqm, while currently the average size of a full title stand measures 551.94sqm - almost half the size.

Loos says Cape Town is the urban centre with the most acute land scarcity as it is constrained by the sea on several sides and the mountain nature reserve in the middle. "Not surprisingly, we see the Western Cape having the lowest average full title stand size of 487.2sqm…"

Loos says the size of houses has also "declined significantly" over the years, although not as rapidly as average stand sizes. Average sizes have decreased from a 203.35sqm peak for homes built from 1970 to 1974, to just 161.89sqm for buildings built from 2015 to 2017.

"It seems, however, that households are far happier to dispense with outdoor space than indoor space in the quest for affordability."

Households are also reducing luxuries to cope with the fact that housing is getting more expensive.

These luxuries include:

  • Staff accommodation

  • Swimming pools

  • Garages and Carports.

  • Studies and Dining rooms.

    The long-term home densification process is expected to continue as land shortages become more critical.

    Loos says the key challenges arising from this include the need to:

  • Create safe open public spaces to replace the private space and amenities many people had on their own properties.

  • Create mass public transport systems to reduce the costs associated with transport congestion.

  • Design lifestyle cities that are attractive to skilled labour. He says urban design is a key driver of a city's competitive advantage and Cape Town is winning this "war" among the Big 4 cities in South Africa.

  • Zone for densification in certain areas, notably along transport corridors and prevent densification in other areas.

  • Improve key infrastructure and facilities such as water/sewerage, schools and hospitals in existing areas.

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