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Micro-living is the way to go nowadays for many urban dwellers as it offers conveniently located apartments at affordable prices.
These small apartments attract young professionals starting out and wanting to get their foot on the property ladder.
Students find these apartments particularly appealing as they are conveniently situated close to tertiary institutions and other essential amenities.
Business travellers wanting a home-away-from-home make use of these properties, as are older people looking to downscale.
Pam Golding Properties says micro-living apartments appeal to millennial creatives and professionals ranging from 20 to 35 years of age.
The agency believes these apartments will attract an increasing number of millennials seeking to do things on their own terms.
Alexa Horne, MD of Dogon Group Properties, says micro-living makes it possible to invest in a niche investment sector. “This sector is set to explode in SA as an alternative residential asset with higher yields than other property classes.”
“Student accommodation investment is considered a very lucrative market outside of a global pandemic scenario. As a result, micro-living apartments close to universities will enjoy demand from student tenants, bringing in ongoing rental returns,” she says.
Horne notes that there is high demand for micro-living apartments as new lifestyle changes emerge. “Millennials are looking for location over square footage.”
She explains that this group wants to live close to the city and business hubs to cut commuting time. They also want to enjoy lifestyle offerings such as being able to walk or ride their bicycles.
What is micro-living?
Micro-living apartments are affordable, self-contained, open-plan living spaces measuring between 14m2 – 32m2 in size. These apartments are designed to accommodate a bedroom, living area and kitchenette.
Horne says these apartments are usually located near key employment nodes in CBDs of major cities and universities.
“Once thought of as a necessary evil of city living, micro-living homes have been elevated to luxury status with high-design makeovers.
Nowadays, these apartments are expertly designed with architectural interest, thought and style that offer a good investment.
According to Gareth Bailey, Pam Golding Properties area principal for Durban Coastal, less is more when it comes to micro-living.
“The definition of micro living is geographically dependent. On our KwaZulu-Natal North Coast, it means living in a sectional title property ranging in size from about 15m2 -30m2.
Bailey says micro-living is trading luxury of space for significantly smaller space in the trendy heart of the metro. Property prices in these areas tend to be high.
“By buying a smaller space, the absolute ticket price is more affordable. If designed properly, this doesn’t come at a lifestyle cost as its facilities match.”
The living space itself requires innovative design to facilitate space saving. Having a fold-up bed that doubles as a dining room table is an example of this, he points out.
Where to find these apartments?
Bailey says micro-living apartments are priced between R500,000 and R1m. He explains that there are a number of opportunities in this niche market.
Investors and buyers can purchase upmarket one-bedroom apartments priced from R1.19m at The Onyx in Umhlanga Ridge Boulevard. This development features three outdoor areas, a rooftop swimming pool and braai area.
Cape Town has a few offerings of micro-living apartments which include 1 On Albert in Woodstock priced from R1.095m. They feature designer interiors, top-end Smeg appliances, flat screen smart TV’s and uncapped fibre internet among other offerings.
In addition, there is also Foreshore Place and The Ivory both offering luxury micro-living apartments.
Horne says micro-living apartments are attractively priced for their location. “Given their smaller size, the entry point for investors is lower than that of a one- to two-bedroom apartment.”
Lower pricing also enables investors to buy additional apartments thus spreading the risk across multiple sources.
Furthermore, they generally have lower running costs and are eco-friendly due to their size and new-build nature.
Micro-living apartments’ central location make the return on square metre comparably high while pricing still appeals to a larger demographic.
According to Bailey, the micro-living model dismisses the traditional notion of valuing property purely on a price-per-square-metre basis. “It requires investors to fully appreciate the value proposition of the development, lifestyle, centrality, convenience, facilities and community.”
Bailey says this departure from square-metre-based pricing means that micro-living apartments may be expensive when judged by traditional methods. However, as long as the development suits the needs of its target market, tenants will find value.
“Micro-living apartments have been known to achieve rental yields far beyond those of traditional long-term rental properties,” adds Bailey.
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