6 benefits of buying into a new real estate development in South Africa
When it comes to investing in real estate in South Africa, secure eco-estates remain a popular choice, particularly along the coastline. And while the benefits of such investments are great, investing in a newly developed eco-estate provides even greater returns.
Image supplied by Serenity Hills
“Whether you’re a first-time home buyer or are looking for a lucrative investment, then there are many reasons why residential units within estates are worth considering,”
commented Reece Daniel, Developer of Serenity Hills in Margate.
“They offer 24-hour security, they’re well-maintained and offer residents all-inclusive facilities from clubhouses and sports centres to hiking trails and picnic sites. But there are many more benefits for those investing in newly developed estates.”
1. Plot-and-plan
In new developments that offer plot-and-plan, the upfront investment is usually often lower. Purchasers are usually only expected to pay around 10% of the purchase price as a deposit, and then in tranches during the construction phase. Importantly, bond repayments commonly only start once construction is complete.
2. No transfer duties, less VAT
No transfer duty is payable on newly built properties, and VAT is included in the purchase price. This translates into significant cost savings at the time of acquisition.
3. Less maintenance
Every home will need some form of upkeep along the line, but when investing in a new development, there are massive savings as very little maintenance will be needed in the first few years. Costly problems associated with the extra wear and tear of old houses are avoided.
4. Increased energy efficiency
With load shedding and water scarcity, energy-efficient homes are becoming a necessity. When investing in a new development, sustainable choices are incorporated such as LED lighting, natural lighting and ventilation, and energy-efficient geysers, with some incorporating solar panels and water storage. This brings down running costs and makes the cost of living much lower.
5. Diversifying investment portfolio
Buying a residential property in an eco-estate is a sound real estate investment – reducing overall portfolio risk and increasing the chance of higher long-term returns. In these uncertain economic times, and as a way to maximise long-term growth, it’s important that investors diversify their portfolios.
6. Great investment during high inflation
The country’s inflation rate spiked to 7.8% in July, the highest rate since April 2009. With increasing inflation, investing in real estate is a smart move as the buyer is more likely to earn a capital gain soon after occupation. When investing at today’s property price, the chances are the property value will have grown by the time of occupation, especially in an inflationary environment. Locking in a lower interest rate is also a smart move for bond repayments before the interest rate rises even further.
