08 Jul 2013
Sales volumes across the Tshwane metropole (Pretoria) over the past year have been at the highest level since 2007 and buyer activity has strengthened by about 16 percent year-on-year, according to Seeff’s branches in the area.
Around 27 628 property transactions to the value of over R174 billion have been recorded for 2012, a marked improvement on the 23 797 transactions for 2011 and the 22 457 transactions for 2010. Seeff’s Centurion and Pretoria East branches report about a 40 percent improvement in sales for the first five months of this year with almost 300 property transactions finalised compared to 210 during the same period last year.
Gerhard van der Linde, Seeff’s Pretoria East managing director, says while it is too soon to point to any real recovery, they are cautiously optimistic about the future of the housing market. Pretoria is a significant force in the country as it is the political power centre and home to embassies from around the globe and four universities including UNISA, the largest distance learning university on the continent. It has become a dynamic place in which to live and is poised for economic and job growth driven by significant infrastructure development spend by the City of Tshwane over the next five years. The city also recently reported that business investment, mainly from the motor industry has increased in the past year.
Sales volumes on the whole are still about 30 to 40 percent off the pre-2007/8 highs, says Van der Linde. This is attributable to the tight bond lending landscape, given that more than 90 percent of buyers require mortgage finance. He says the banks are too conservative when it comes to lending against the security of bricks and mortar. This, combined with unrealistic price expectations on the part of sellers, especially at the top end of the market, continues to weigh on the market.
In Pretoria East, secure homes, mainly in security estates and complexes have seen growth in the average sales prices, Van der Linde says. Since 2007, sectional title prices have improved by between 10 and 42 percent, predominantly in the sub R1.2 million sector. Full title house prices remain subdued with below-par growth of between 3 and 10 percent. Security estate homes have seen above-average growth rates that range from 15 percent at the Silver Lakes Golf Estate to 22 percent at the Woodhill Golf Estate, he says. New developments with vacant stands that sold prior to 2007 are doing worse, now selling for around 60 percent of the price paid for it in 2007.
While the area is home to a diverse selection of property options to suit every budget, Van der Linde says that upmarket buyers are spoilt for choice when it comes to luxury homesteads. They are marketing a luxurious Tuscan home of around 2 000 square metres on a stand of almost 2.5 acres in the Mooikloof Equestrian Estate for R19 million. The home has six bedroom suites, a number of living rooms, a large kitchen, movie theatre, bar room, wine cellar, gymnasium, a guest flatlet and three swimming pools.
Centurion managing director, Steve van Wyk says that Seeff has recorded a 33 percent improvement in sales volumes for the first few months of this year compared to the early part of last year. He echoes the sentiment of Van der Linde in that a conservative mortgage lending landscape and high price expectations are major challenges for the residential market. There has been an even spread in the sale of freehold houses and townhouses, but vacant stand sales remain subdued, as it costs up to 30 percent more to build a new house. Townhouses are selling for between R430 000 and R1.43 million while freehold houses are selling for between R535 000 and R3.455 million.
Upper income buyers can expect to pay around R7.3 million for a home in the secure Midstream Estate. Set on a stand of just over 3 500 square metres, the double storey home offers around 750 square metres in floor space with finishes such as underfloor heating and air-conditioning throughout. The architectural design includes a porte-cochere entrance that opens to a double-volume hall where a sweeping staircase leads to the upper level. Design features include columns, arches and double stable doors in the living areas and balconies and terraces surround the home and provide views over the landscape. The home has several lounges and dining areas, a private study, four bedrooms, a gymnasium and a heated swimming pool.
Van Wyk says the future growth prospects for the greater Centurion area are upbeat as it is one of the fastest growing business and residential growth nodes in the greater Johannesburg and Tshwane areas, with access to major business arterials and a number of business nodes. Access to the Gautrain is a major draw card. In the last year, he says they have seen an influx of buyers drawn to the convenience and security estates and complexes offer. While house prices on the whole remain subdued, security estate homes have grown by between 12 and 18 percent over the past few years.
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