Young Buyers fuel Sectional Title and Investment Growth

Top 3 Highlights

• Sectional Title properties offer affordability, security, and long-term value for first-time buyers and investors.
• Young South Africans still prioritise property ownership, despite rising living costs.
• ST schemes are ideal for entry-level ownership, rentvesting, and buy-to-let investments.

Main Highlights: Step-by-Step Breakdown

1. Sectional Title Is Leading the Way

Sectional Title (ST) properties now make up more than a third of all residential sales in South Africa, and over 50% in some areas—up from just 10% in 2010. These homes are increasingly attractive for their affordability, security, shared amenities, and strong investment potential.

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“Whether you’re an investor or a first-time buyer, ST properties offer smart, sustainable living and long-term peace of mind,” says Andrew Schaefer, Managing Director of Trafalgar Property Group.

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2. Affordability Makes Entry Possible

The average ST home in SA is currently around R1.2 million, compared to R1.5 million for freehold properties. Recent policy changes have helped too, such as the increase in the transfer duty threshold to R1.21 million, placing many ST units in a tax-free zone.

3. Sectional Title a natural fit for Young Homebuyers

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“Purchasing a ST home is an ideal entry point for young professionals aiming to build equity without overextending financially,” adds Schaefer.

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Young adults aged 20 - 35 still account for nearly 30% of property transactions in South Africa, with 69% of those purchases made by first-time buyers, according to recent Lightstone data. Despite economic pressures, this group is finding creative ways to enter the market.

4. OOBA: Youth Still Value Homeownership

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“Although younger buyers are entering the market later than in previous years, they remain committed to the idea of homeownership,” says Rhys Dyer, CEO of ooba Home Loans.

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While interest rates remain relatively high, the percentage of first-time buyers aged 24 - 33 has decreased, but Dyer notes a resurgence in the 33 - 43 and 43+ brackets, indicating delayed, not lost demand.

5. Creative Strategies Are Emerging

From buying with partners to joint applications with family members, more young buyers are leveraging innovative strategies like ‘houses before spouses’, which increased from 14% in 2014 to 18% in 2024.

OOBA data shows a healthy 9.6% average deposit among first-time buyers in Q1 2025, reflecting a responsible approach to financial planning even in tough conditions.

6. Rental & Investment Appeal Growing

ST homes offer above-average rental returns due to high urban demand and security features. Schaefer highlights that well-managed schemes can enhance property values and reduce maintenance headaches through collective upkeep funded by levies.

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“The Sectional Titles Schemes Management Act ensures transparency and financial certainty, critical factors for today’s cautious investors,” says Schaefer.

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OOBA data confirms the strength of the buy-to-let market, with youth-led purchases increasing by 4% year-on-year in Q1 2025.

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“We’ve seen notable growth in the rentvesting trend, particularly in the Western Cape,” adds Dyer, where buyers rent where they live and let out the properties they own.

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7. Sectional Title for Retirement Buyers Too

It’s not just young buyers who see value in Sectional Title. Older buyers increasingly prefer ST schemes for their cost-effectiveness, lower levies, and secure living environments compared to HOA-run estates.

These schemes also promote social interaction while preserving privacy, making them attractive lifestyle options for retirees on fixed incomes.

Conclusion & Way Forward

‍Sectional Title is no longer just a stepping stone, it's a dominant force in South Africa's housing landscape, driven by affordability, lifestyle value, and strong returns. For first-time buyers, it offers access and equity; for investors, it delivers consistency and resilience.

Young South Africans, while facing real economic challenges, are finding ways to participate in the market. Their determination is being matched by smarter buying behaviour, bank support, and product innovation. The growing popularity of joint applications, deposit-saving strategies, and rentvesting highlights the adaptability of this new generation of buyers.

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“Our commitment remains to help more South Africans, especially young professionals, realise their homeownership dreams,” concludes Dyer. “It’s not just about buying property. It’s about building a foundation for generational wealth.”

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As South Africa’s property market continues to evolve, Sectional Title homes will remain a vital tool in helping people from all walks of life secure stable housing and long-term value, proving that smart design, strategic location, and shared living spaces are the future of urban property investment.

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