Aspire to own: the appreciating value of property
Category Useful Information
Everybody wants to become a property owner at some point, rather sooner than later in most cases. There are various reasons behind this such as the freedom to create your own personal sanctuary without the permission of a landlord. Not having to worry that your landlord may decide to sell the property or need the property for their personal use, causing you to have to relocate. Having a family home that you could leave to your loved ones when you pass on. The list goes on but one of the main and most popular reasons is the investment side of owning property. Unlike a vehicle that instantly loses value the moment you drive it off the showroom floor, a home increases in value. In this article, you will learn all there is to know about the appreciating value of property.
Understanding what home appreciation means in real estate
Home appreciation relates to a house or investment property increasing in value over a period of time. There are many factors that can affect appreciation rates which include the location, condition of the home, nearby amenities, supply and demand, inflation, interest rates, and the state of the economy. All of these factors should be taken into consideration when purchasing a home or land.
Which types of homes in South Africa appreciate the quickest?
The South African residential real estate market is separated into four types of property: landed homes, apartments, condominiums and villas. Sectional title homes have proven to be increasing in popularity while the sales of freehold homes have been decreasing. A sectional title unit is a property in an undivided share of common property. These units are known as townhouses, duplexes, flats or apartments. Sectional title properties offer increased security, affordability, and a communal lifestyle that has become highly attractive to both new and experienced property buyers and is therefore in demand.
How much should a house appreciate over a 10-year period?
In order to determine the long-term value of a property, Knowledge Factory's SAPTG analysed an average-priced property over the past five, 10, 15 and 20 years.
The median price of one of the properties used for this research in 2008 was R 970,000, with the extrapolated value at R 1 590,462 in 2012. According to the SAPTG data, it was revealed that middle-market properties appreciate at a compound annual growth rate (CAGR) of 13,15 per cent, calculated over 20 years.
While statistically, middle-market properties show a reasonable value growth rate, a property expert says that the higher the value, the greater the level of appreciation.
The benefits of owning properties in South Africa
One of the benefits many people don't know about is that there is no VAT payable on property in South Africa. Now that you know the different property types, the way in which properties appreciate in value and the aspects to consider when purchasing, you will be able to make informed decisions along your home ownership journey.
If you're looking for a full-title, freestanding cluster home in the most sought-after residential suburbs, a stone's throw away from Africa's richest square mile and largest business district and close to all major corporates; yet nestled by beautiful, picturesque greenery and nature, then Futuredev Properties has exactly what you're looking for.
Author: Futuredev Properties
