The rise of ‘middle neighbourhoods’ in the new property landscape

Urbanisation has been a key watchword of the 21st century with city populations rapidly swelling, but since Covid lockdown restrictions eased, there’s been a spike in reverse migration with a growing number of people moving from inner cities to the suburbs and even further afield.

However, not everyone seeking a less urban environment wants to – or is able to - relocate as far away as traditional suburbia and this has led to an emergent trend which has also become an excellent investment opportunity for investors who are quick off the mark.

These days, more people want a little more space and less congestion but, for any number of reasons, including proximity to work or friends and the convenience of proximity and accessibility to the city, some prefer not to move too far away.

This has precipitated a renewed interest in what is known as ‘middle neighbourhoods’ which are situated on the outskirts of cities.

Primarily built before the 1940s, these areas are usually a mix of small-erf single-family homes and buildings with multiple units with multifamily housing options and the following characteristics:

• Affordability;
  
  
• Employment opportunities;
  
  
• High walkability scores;
  
  
• A broad selection of amenities which include shopping, and restaurants;
  
  
• Low or manageable crime rates;
  
  
• Sufficient school performances.

They are typically areas where, although upliftment and regeneration are still needed, the quality of life is good enough that investors are willing take the risk of buying into the neighbourhood.

Examples of middle suburbs in Johannesburg include areas like Melville and Observatory which offer the right balance of urban amenities and elbow room and where investment is already being seen to make a difference to the quality of the areas.

In Cape Town, suburbs like Woodstock, Walmer Estate, Rosebank, Mowbray and Observatory have been on developers and buyer’s radar for some time now and regeneration has been underway for a few years already.

Target market

A decade ago, these suburbs were often overlooked as the domain of students and the arty set and, whilst many properties are still student accommodation, there has been a steady rise in first-time buyers and young professionals moving into ‘middle’ suburbs in recent years.

These areas are especially appealing to young professionals who are drawn by the hybrid lifestyle which allows for easy balance between office and working from home as well as being in close proximity to all the amenities they need.

Singles and professional couples tend to better catered for than young families due to the shortage of small family homes and, with more vacant business premises being converted into residential units, this is likely to be the case for some time. 

Challenges

Despite the demand, there are a number of challenges, including: 

• Old and inadequate infrastructure;
  
  
• Crime;
  
  
• A lack of reliable public transport;
  
  
• Traffic congestion, especially during working hours.

Knock on effect

However, the positive impact of investment in these areas is already clearly evident. And we’re seeing that the increased interest in residential real estate has precipitated new commercial development which, in turn, attracts more home buyers.

One form of development especially well suited to these neighbourhoods, is mixed use development, which combines residential with commercial components such as retail, office space and restaurants.

This is already proving very successful in many of these suburbs including Woodstock, De Waterkant and Mellvile.