Good news if you own a decent chunk of property, but who knows how this will play out for those looking to break into the property market.

A Cape Town Municipal bylaw was recently amended, creating an automatic right to build a second dwelling on almost all properties in Cape Town.

That’s a huge break for individual land owners looking to unlock the value in their land, and part of an effort by the City to meet the growing demand for housing.

More from Private Property:

Lara Colananni, Specialist Conveyancing Attorney at Guthrie Colananni Attorneys, says: “The City of Cape Town’s Municipal bylaw was recently amended to create an automatic right to build a second dwelling on almost all properties in Cape Town, even if the zoning is single residential, rural or agricultural.

“The beauty of the amendment is that it creates opportunities to unlock value in almost every property in the Cape without going through the tedious process, costs and stress of obtaining a departure from Council to erect a second dwelling on your property.

“The value is unlocked by selling the second dwelling or the rights to construct a second dwelling on the property and this can be done by subdivision or by opening a sectional title scheme on your property.”

If you’re keen to make some extra cash, or sell of a section of your property, you’ll need to bear a few things in mind first.

Here’s Claude McKirby from Lew Geffen Sotheby’s:

…he cautions that while many larger properties in older established suburbs lend themselves to being divided, it is essential to bear in mind that set minimum sub-division sizes vary from suburb to suburb and this will determine whether to opt for subdivision or sectional title.

“In Bishopscourt, for instance, most plots cannot be divided to less than one acre (4 046m²), so subdivision is not possible but the land can still be split by creating a sectional title register, which is also a simpler process.”

He adds that the position of the existing house is pivotal as a building situated in the centre of a plot will limit options for further development as will the possibility of creating two separate access points.

And Lew Geffen himself, with why it’s such good news for those with a little extra space to burn:

“The fact that sectional title ownership is communal ownership might be considered unappealing to some people, but in most situations, the benefits far outweigh the disadvantages.

“The main advantages are that you can now sell the separate granny flat or cottage on your property without obtaining a subdivision and, most notably, you don’t have to sell your whole property if you want to liquidate some capital.

You also don’t have to worry about the costs and cash flow not the time-consuming inconvenience of building a second dwelling, because you can sell the right to extend the scheme and municipal services and amenities don’t have to be duplicated.”

I guess first-time buyers can look forward to snapping up granny flats, or paying ridiculous prices for single bedroom ‘flats’ anywhere near the CBD.

Do they still build houses with basements? Anyone got one going spare?

[source:privateproperty]