Thinking Inside the Box

A Paddocks Sectional Title Lifestyle Blog

Pets and property prices in sectional title schemes

pets

By guest writer: Estie Kretschmer

A few months ago I read an article by Jennifer Paddock (1), where she mentioned an Australian study about the positive influence of pet-friendly complexes on property value. Being a pet-parent myself, it sparked my interest and I immediately started to do my own research.

PetsInTheCity.net.au (2) has a wealth of information pertaining to keeping pets in a city environment. It reports that people are willing to pay 5-10% more when buying an apartment or townhouse if they are able to keep their pet; and estate agents reported a 50% increase in buyer interest on properties for sale that were advertised as pet-friendly. A related article on Domain.com.au (3) in 2014 confirms this finding.

Exploring the link between the Australian and South African property and pet care, I looked into pet care first. Euromonitor International (EM) published an extensive research report in August 2014 regarding pet care in South Africa (4), which has shown an immense growth in this area, despite economic instability due to rising food and fuel costs, high unemployment, and household debt etc.

An 8% compound annual growth rate (CAGR) in pet care was reported in 2013. Now, compare that to South Africa’s overall GDP growth in 2013 of only 2.2%, and we see that pet care in South Africa (and across the world, according to EM) is relatively resilient to recession.

During 2013, Australia had a below-average value growth in their pet care. EM forecast a CAGR increase of 2% for South Africa over the 2013 – 2018 period, while they expect a static growth in Australia for this period. South Africa clearly outweighs Australia in this regard.

It is interesting to note that EM reported in 2010 that South Africa had 5.3 million pet households, and this has clearly grown since then. In 2013 EM stated that “One of the key drivers within the South African pet care market is the rising trend of pet humanisation.” Already in 2011, Supermarket & Retailer (5) had indicated that pet parents in South Africa consider their pets as part of their family. They quoted statistics showing that 85% of pet owners say that the pet is part of the family; that 57% of pet owners agree that the pet is their best friend; and that 81% of pet owners say they do not feel alone when surrounded by their pet(s). The magazine also reported that security complexes and apartment owners are increasingly owning pets which includes dogs, cats, fish, rodents, birds, and reptiles. Interestingly, owning larger dog breeds is on the decline.

I am quoting lots of figures, but one thing is clear: South Africans love their pets. This is one area where we DO beat the Aussies!

The South African Sectional Titles Act was based on the Strata Act of Australia. This indicates that law-makers recognise a high level of similarity between the two countries in respect of living arrangements and general living standards. I contacted some well-known domestic and international real estate agents regarding their experience as to the connection between pet-friendly set-ups and property value in South Africa.

Across the board they agree that, “Certainly there is a need for apartments where pets are allowed and we have lost sales where body corporates have refused permission. Some of our sectional title schemes have indeed relaxed their rules concerning pets due to popular demand.” (Laurie Wiener, Managing Director, Pam Golding Properties, Western Cape).

Michelle Cohen, principal of Leapfrog Property Group, adds “One of the questions frequently asked is if the complex is pet-friendly… I have found that pet-friendly complexes are very much in demand.”

Jo Ann Gray, operations manager of Firzt, doesn’t hold back either stating that “…buyers requiring pet-friendly accommodation would pay a premium for this ‘luxury’. Trustees/Body Corporates should be encouraged to revisit previous positions held in this regard. Certainly rules should deal with the most common problem in this regard which is noise levels and the limitation of the size of the dog depending on the size of the garden…. Elderly folk are dependent on their pets for companionship, children in my opinion need to grow up understanding the responsibility of pet ownership and the comfort stroking a pet imparts is essential for emotional/trauma healing.” She added that “The demographic of buyers who purchase in complexes are either elderly or youngsters starting out, newly married expecting to start families due to the affordability of what they are able to purchase.” Denese Zaslansky, CEO of Firzt, agrees that pet owners would not purchase in complexes where pets are not allowed.

Sandy Hammond, sectional title specialist from Seeff, confirmed that “Those complexes that have banned their pets do lose out as, in my experience, there are more buyers looking with pets than without.

Tony Ketcher, Managing Director of Seeff in Randburg states “I can think of quite a few sectional title buyers who turned away from a potential purchase because the complex was not pet friendly..so yes there is potential for the value of a unit to be enhanced through the assistance of pet friendly policies.

Sandy Geffen from Lew Geffen Sotheby’s International Realty South Africa related a story about her daughter who “… paid a premium to stay in a very central townhouse because they were pet friendly,” and suggested this would answer the question.

Chantell Marais, head of operations at Etchells & Young, feels: “We have definitely found that pet friendly complexes are very sought after… We have a very high demand for pet friendly complexes.

There are no specific figures and percentages as in the Australian study, as no formal research has yet been done in South Africa, but this clearly shows that a pet-friendly policy creates greater demand and desirability, a larger buyer-pool, and longer marketing period, etc. These are all aspects which have a direct bearing on the value of the property. On the other hand, sales were lost or not even considered on properties where pets were banned. This policy has clearly become detrimental to property value.

The prescribed conduct rules might be amended, repealed, and added to, following certain procedures, provided these changes are not against the spirit of the STA and prescribed management rules. The spirit of our Sectional Title Act is, among other things, to protect the investments of buyers. When connecting all these dots, I cannot but come to the conclusion that a pet-friendly rule in a sectional title complex is in accordance with the spirit of the Act, and a ban on pets goes against the spirit of the legislation.

References:

  1. Paddocks Blog – Want to increase the value of your sectional title property? Pet friendly policies could help!
  2. Pets in the city
  3. Domain – Can I bring my dog too?
  4. Euromonitor – Pet care in South Africa
  5. Supermarket – Embrace pets as part of the family

Image source: jackspets.com

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8 comments on “Pets and property prices in sectional title schemes

  1. kukri1946
    May 2, 2015

    All very well when all owners are staying in the complex, these days as little as 20% are owners and the rest are tenants, and tenants do not care about the value of the complex increasing.
    Cats are the worst as they travel and get into units and steal food waiting to be eaten, they wee in other peoples units and poop in residents gardens, there is a lot of hatred for cats in complexes.
    Dogs seem to be ok but there is a noise factor that annoys – in Oz if the municipality gets a noise complaint about a dog the owner of the dog has to hire a “bark collar” for a min. of 2 weeks and if that does not stop the dog barking they have to keep using the collar until it stops barking. (the collar give the dog a little shock when it barks)

    • paddocks
      May 4, 2015

      Thanks for your comment!

    • Estie Kretschmer
      May 19, 2015

      Hi Kukril, of course what you are talking about here is the setting of reasonable conditions as well as enforcing these. Not the actual conduct rule itself.

      All STs can be held at ransom by ANY of their conduct rules if these are not properly worded, and not properly enforced. This does not only pertain to pets. Children, noise, functions, etc are all known and frequent culprits.

      This article only deals with the very real situation that – these days, due to our evolving lifestyles – property demand and values are negatively affected by a no-pets rule. All conduct rules need to keep up with changing times and conditions. Some rules that were valid once, are not necessarily effective, in keeping with the times, or even legal these days.

      You will no doubt be aware that it is advised that the majority of owners in a complex are living on site, for the exact reason you state. Failure to do so, is to the detriment of the complex and everyone’s investments.

      • kukri1946
        August 30, 2015

        Agreed – resident owners make the best residents. most complexes however only have a small percentage of owners to tenants, and therein is where problems arise.

    • Estie Kretschmer
      May 27, 2015

      And as far as the “bark collar” goes – this is inhumane and has been outlawed in many states and countries around the world.

      There are many training possibilities out there, using the power of positive reinforcement, to deal with issues. Cruel methods in order to elicit a desired response, should never have a place in society.

      • kukri1946
        August 30, 2015

        In Australia, should someone complain about your dog barking you have to hire a bark collar from the municipality!
        There is also a gadget named a Dazer – this emits a sound that humans cant hear, but dogs do. this is used to train dogs not to “yap” – i believe nothing will stop a dog barking if they sense a danger!
        Humans are also subject to shock therapy when they are “sick”.

  2. sectionaltitles
    April 29, 2015

    Reblogged this on SectionalTitle.co.za and commented:
    An interesting perspective on the relationship between keeping pets and property values in the context of sectional title. Some criticisms:
    1. The writer conflates “pets” and dogs”.
    2. Not every sectional title complex is suitable for all types of pet, such as dogs.
    3. The desire to keep a pet (dog) should be weighed against the conflict that often arises when pets are on the property.

  3. D Viljoen
    April 29, 2015

    Great article, thanks!

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