Despite a 20% decline in South Africa’s millionaire population over the past decade, it remains a hub for the continent’s high-net-worth individuals, according to the Henley & Partners’ Africa Wealth Report. Meanwhile, government data show that roughly half of the 63-million-strong population lives in poverty, relying on at least one monthly welfare payout.
Housing stock in estates — of varying degrees of luxury — is the fastest-growing segment in the country’s residential property market, according to Lightstone. There are almost 490,000 homes in such developments, a fourfold increase since 2003, the real estate data firm said.
Estate living emerged around three decades ago when developers financed golf courses by adding properties within secure perimeters, creating a sense of community based on shared values and lifestyles, said Andrew Golding, chief executive of Pam Golding Property Group.
Crime, which, according to World Bank estimates, erodes $40 billion — 10% of South Africa’s GDP — annually, more than a decade of power cuts, and water outages have since spurred these developments, which typically include backup solutions.
In housing developments like estates “the costs per square meter are amortized over a greater number of units” allowing for more amenities than typical freehold or free-standing properties, said Golding.
Competition in the luxury market has prompted estates to adopt cradle-to-grave strategies, introducing amenities like kindergartens, medical and senior living facilities and office parks, minimizing the need for residents to leave their enclaves.
As buyers grow accustomed to these offerings, they are likely to demand similar features in mid-market developments, said Siphamandla Mkhwanazi, a senior economist at FirstRand Ltd.’s FNB. “What used to be luxury is going to become more average.”
