Estate Living on the Rise

Pent-up demand for gated lifestyle investments with security

Lifestyle gated estates are a big deal in South Africa. According to a 2016 Lightstone report on estate living, it was found that residential properties within estates make up around 15.1% of the total market value. This is particularly interesting, since residential estates made up only 5.1% of the total volume of real estate in South Africa. In 2016, the average home price in South Africa was R700 000, with the average home in a gated estate being around the R2 million mark.

Having grown in popularity over the past few years, it’s clear that estates aren’t just a passing trend. There are over 7000 freehold and sectional title scheme estates with a total amount of 335 000 properties with a collective value of R800 billion according to Lightstone and demand is picking up. At least one in ten South Africans choose gated communities when making residential property purchases despite a drop in new estate developments.

What makes a good estate?

With a record number of estates around the country, it’s important to keep our sights on what distinguishes a good estate from a bad one. A well-known benefit of estates is their security benefit as well and lifestyle convenient aspects. Years ago, this may have meant building a wall around a bunch of houses and calling it a day. In today’s market, however, advances in technology have meant the bar is considerably raised.

As Dr Andrew Golding points out, however, it goes beyond security: “The trend is towards so-called lifestyle estates which encompass work, live, play and shop, all within a secure environment which provides a sense of community.” It’s this sense of community that many South Africans are willing to pay a premium for. How this is achieved will differ from one estate to the next, depending on the layout and availability of amenities. Regardless of the type of estate, one thing is clear: A good estate is one that offers residents a better quality of life than they would’ve had elsewhere.