Already a growing trend in South Africa prior to Covid-19, the pandemic has accelerated the concept of dual living and estate agents in many areas in Cape Town are fielding an increasing number of queries for properties that will accommodate more than one family, but they are few and far between.
Claude McKirby, Co-Principal for Lew Geffen Sotheby's International Realty in Cape Town's Southern Suburbs says: "In recent years, we saw the median property prices, especially in the most sought-after areas, increase considerably and dual living became a viable option as it offers a very practical living solution and allows investors to get a foot in a market which might otherwise be out of their reach.
"With the additional financial pressures of Covid-19 in an already subdued economy, demand for such properties shows no signs of abating and is very likely to increase exponentially in the coming years. "Also contributing to the rising popularity of the trend is the shortage of retirement accommodation, the added security offered by multiple residents, the financial saving of a single set of rates as well as the increasingly common need for home owners to reduce the bond burden by taking in a paying tenant."
He adds that dual living properties are also an excellent investment option if you are buying to enter the rental market as two homes on a property will generally yield a higher combined rental than a single dwelling.
"The trend is especially popular in areas with larger erfs like Hout Bay and Noordhoek where agents are reporting a notable spike in demand for homes which can be shared," says McKirby
"However, it can be more difficult in the more densely built-up areas and older suburbs like Observatory, Woodstock and Muizenberg, where the Victorian semis take up most of the erf and there is not much room left to add extensions or granny flats.
"Many of these older houses also fall under Heritage due to their age and going up a floor without a painful and lengthy application process is therefore not an option."
Chris Cilliers, CEO and Co-Principal of Lew Geffen Sotheby's International Realty in the Winelands, cautions that investors looking to purchase property with an eye to creating a dual living home should take several factors into consideration so ensure that the additional investment adds to the resale value of the property.
"It's always advisable to thoroughly research the market in your chosen area as over-capitalisation is one of the major pitfalls which will not only diminish return on investment in the long term but could also defeat the object of earning a decent income in the short term because the costs outweigh the revenue.
To this end, a reputable and experienced estate agent with a thorough understanding of the market in the area will be able to assist you regarding prices and market trends as well as offer guidance in making a savvy selection.
She adds that if you want to buy and build a separate dwelling, it's imperative to first check whether you'd get local authority planning permission before taking the leap.
"One of the most important factors for successful dual living is to ensure all inhabitants enjoy a measure of privacy," says Cilliers, "and home owners need to carefully consider their needs and decide whether a separate, self-contained dwelling would be most suitable or if converting or extending existing structures would suffice."
Although one wants to avoid over-capitalisation at all costs, McKirby also warns against cutting corners if you are planning on making more than a few internal alterations.
"If you want to add extensions to an existing building, or to build a separate cottage or granny flat, it's crucial to consult a reputable architect and to have all plans approved.
"Failure to do so can have many repercussions, including years down the line when you decide to sell and the plans you hand over don't match the current structure.
"And if the option of 'building up'or going double storey is being considered, then an engineering report is definitely required, as the foundations and the rest of the existing structure may need to be reinforced."
Cilliers concludes: "In the current economy, whether you want to offset the rising cost of living or simply create a new income stream, dual living makes a lot of sense.
"As long as all the normal rules of common sense apply in terms of buying in the best area you can afford, and being careful in the planning stages to ensure that the proposed changes or additions add to the property value, then purchasing a dual living home is a sound long term investment."
Article published courtesy of My Property
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