The micro-living trend has arrived in South Africa and is making it possible for easy access to property investing in a niche investment sector that is set to explode in SA as an alternative residential asset with higher yields than other property classes. The world is abuzz with change, and new lifestyles are being embraced. Millennials are looking for location over square footage. They are getting married later and putting careers first. They want to be close to the city centre, close enough to walk, bike, or rely on public transportation – not wasting time on commuting. Enter demand for the growing lifestyle trend of micro-living, an affordable self-contained, open-plan living space designed to accommodate a bedroom, sitting area and kitchenette in 14–32 square metres situated in the city centre, close to all amenities.
Micro-flats are usually located near key employment nodes in CBD’s of major cities and universities – often in areas where development space is highly limited.
Student accommodation investment is also considered a very lucrative market so micro-living apartments near to universities will enjoy demand from student tenants, bringing in ongoing rental returns. Micro apartments also appeal to new working professionals branching out from their childhood home, and business travellers of all ages who purchase these apartments to stay in whilst travelling for work. There is also a market for the newly retired who are downscaling and wish to spend time travelling and not being hindered by the maintenance and upkeep of a larger home. The key to real estate is to get your foot on the property ladder as early as possible and micro-living units are providing this opportunity. Given the smaller property size of micro-apartments, the entry point for investors is much lower than that of say, a 1 to 2 bedroom apartment. Moreover, the lower price presents the opportunity for property investors further up the ladder to purchase more than one apartment, so the risk is spread across multiple sources.