South African Home Buyers Appreciate Value of Green Homes

Fourleaf eco Housing Estate in Port Elizabeth, South AFrica (GBCSA)

South Africa - The residential sector in South Africa is embracing green, with new builds and existing stock the focus of a domestic market with already the highest percentage of green building projects currently underway.

Speaking at the Green Building Council South Africa’s (GBCSA) 10th annual Green Building Convention 2017 conference held at Century City in Cape Town, Sandra Gordon, senior research and market analyst at Pam Golding Properties, explained the current trends that will ensure the growth of green building from commercial to residential property sectors.

Gordon said that the transition to green building practices in the local residential market is further encouraged by young first-time buyers who, with limited spending power, appreciate the value offered by green homes. Gordon was presenting her findings in a session entitled The Value of Green Homes: Usage and Attitudes in the Residential Space.

“The service delivery and energy and water security offered by green precinct developments, along with the competitive pricing of sectional-title properties, are increasingly attractive to first-time buyers,” Gordon noted.

Gordon also pointed out that two-thirds of South Africa’s population is younger than 34 years – the typical age of the first-time buyer – and, with the majority of new mortgages awarded to first-time buyers each year, the demand from young buyers in urban areas is expected to continue.

“New developments in major growth nodes are increasingly mixed-use and include retail, office, residential and sometimes hospitality”, Gordon explained.

She further explained 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,” added Gordon.

At least one in 10 South Africans choose gated communities when making residential property purchases, said Gordon, citing Lightstone research. There are currently nearly 7 000 estates with 355 000 active residential properties valued at R800-billion in SA. 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, 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, Gordon said.

During the past year most sales were of existing homes rather than new housing units, Gordon notes, citing Gumtree Head of Property Barrie Swart’s comments that the inclusion of green features means that homes are sold or rented more quickly.

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

While Gumtree does not believe that green features affect the price of the property, most Pam Golding Properties agents surveyed agree that green features do in fact result in a price premium being achieved for a home.

The underlying trends in SA’s housing market suggest that the transition to green will continue to snowball. The anticipated growing cost of utilities coupled with electricity and water shedding increases the appeal of alternative, greener sources of energy and water, and greater efficiency for both, in homes.

“More sustainable homes that are well-located and easier to maintain will continue to attract South African buyers”, summarised Gordon.