While the most active price bands in Pretoria East are between R3 million and R5 million, buyers in higher price ranges are less sensitive to interest rates and are still willing to pay higher prices, whereas the East Rand has experienced an increase in sellers due to financial strain from higher interest rates.
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According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, property markets across the country are facing a shift in activity following the steady stream of interest rate hikes that have put pressure on household budgets and squeezed buyers’ affordability levels.
Goslett, warns consumers that the property market is already beginning to change as a result of the higher interest rates. “Based on our website traffic, we are noticing that across the country there has been less interest from buyers and more leads from homeowners who are looking to sell,” he notes.
Speaking into Kempton Park, Benoni and surrounds, Neville Brits, Broker/Owner of RE/MAX Dazzle, explains that their markets have noticed the same shift. “Our markets rely heavily on bond finance and therefore any adjustment in interest rate will slow down the sales rate. At present, almost 90% of our clients require some sort of finance and the more expensive money is to lend, the slower the sales rate will be. It also has increased the amount of sellers coming into the market because they cannot afford their bonds as a result of the higher rate. Many clients in our market have 85% to 95% loan-to-value so they feel the pinch much quicker than people who have more equity in their home loan or much lower loans,” says Brits.
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Brits explains, that the financial pressure as a result of the interest rate increases is one of the more common reasons for selling in their areas of operation. “After that, semigration and immigration are the second largest motivators for selling in our areas. Many people are tired of the safety concerns, crumbling infrastructure in the local authorities and lack of service delivery. They want to move to places that can fulfil those needs,” he adds.
He explains, that this means that buyers are spoilt for choice with so many homes on the market at the moment. “This essentially means that they want to pay less and expect more from a house than they would have a year earlier. We are also noticing that security, lifestyle estates, and access to good schooling remain important factors among buyers.”
To those hoping to sell within the current market conditions, he, reiterates the importance of understanding that you are competing against many other homes in the market. “Make sure your agent shows you what the comparative prices in the area are. Over-pricing your home will only lead to sale delays or low offers. Many sellers who are moving to the Western Cape, for instance, try to sell their house for more because house prices are higher in that province. That is a recipe for disaster because you need to compare apples with apples,” he warns.
His advice to sellers during these times is to make sure the home presents well by attending to the small things that could put a potential buyer off. “Don’t invest heavily in infrastructure or additions when considering to sell within the current market because it is unlikely that you will get a good return on the investment.”
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For those looking to buy, he advises discussing your priorities with your agent. “Tell them what features are non-negotiables in your future home. After viewing homes, point out the things you liked and the areas that concerned you. Essentially, agents are matchmakers and they need to shortlist the things that will work for you to help make finding the perfect home easier. Try and work with one agent who is delivering a professional service and making your life easier, not one that just acts like a tour guide showing you all the homes in the area,” says Brits.
As a final piece of advice, Goslett reminds homeowners that the need to buy, sell, or rent homes will exist under all market conditions. “Leaning on the advice of an experienced real estate professional will help individuals take advantage of the opportunities and avoid the pitfalls that exist in any market,” says Goslett.
Pretoria property offers value as it shifts to a buyer’s market
According to Lightstone data, Pretoria achieved some 29,828 transfers worth over R38.7 billion during the 2022-year at an average selling price of R1.2 million. About 75% of all transactions fall below R1.5 million with only just under 6% of the market falling above R3 million.
While Pretoria has been one of the better performing metros in Gauteng with prices growing by 91% between 2010 and 2022 compared to 71% for Johannesburg according to the StatsSA House Price Index, the market is shifting, says Gerhard van der Linde, licensee for Seeff Pretoria East.
He says the market is now largely “stuck in low gear” as the higher interest rate and cost of living drives down the demand for residential property. Consequently, the challenges are now mounting for sellers and prices are under pressure as the market begins to shift in favour of buyers with no real house price growth expected.
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With more properties likely to hit the market, and fewer buyers incentivised to act, supply will continue to outpace demand. That said, the more is now offering good value for money for those who expect an inevitable upswing in future and are willing to buy now. There is opportunity in every crisis, he adds.
The most active price bands in Pretoria East are between R3 million and R5 million. In the higher price ranges, buyers are not necessarily that sensitive to the interest rate, and higher asking prices are still achieved.
Property remains an excellent and stable investment, outperforming many other asset classes, continues Van der Linde, adding that he strongly recommends that buyers recognise opportunities and continue to put themselves out there on the market. Pretoria East is home to some of the most popular suburbs and estates in the country and offers solid property investments.
The east of the city also has a buoyant rental market which has seen a dramatic increase in the demand for rentals this year according to PG van der Linde, rentals manager for Seeff Pretoria East. Rental rates have seen an increase, but generally only in line with inflation.
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Tiaan Pretorius, manager for Seeff Centurion, says the area is also seeing a decline in potential buyers, but there is still a core of serious buyers in the market and with more properties coming into the market, buyers have a large selection to choose from.
The market is showing some sensitivity to the higher interest rate, and sellers will need to ensure their pricing is competitive. He says the Centurion remains active up to R4.5 million with strong movement in the sub-R2 million range, and for high-end estates, in the R2.8 million to R3.5 million range. Security properties such as townhouses are also selling in the R800,000 to R1.2 million range.
Pretorius says further that sellers must use a reputable agency in this market as properties listed on a property portal in Centurion have less than a 35% chance of selling, as there is a lot more involved in getting a property sold than merely listing it on the internet.
In this market, it is best for serious sellers to work with an agency with a strong current buyers’ book. Buyers should focus on getting preapproval as it saves a lot of time during the transfer process and enables them to submit a more confident offer.
First-time buyers can also still find excellent value in Centurion with sectional title property available below R800,000 in areas such as Doringkloof, The Reeds and Highveld and full title houses from about R1.7 million.
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The area is particularly sought-after for its choice of estates such as Centurion Golf Estate, priced from about R2.8 million, Bluevalley Golf Estate from R3 million and Thatchfield Estates from just R1.5 million.
The Centurion rental market remains buoyant with an uptick in high priced rentals from R18,000 per month onwards although the R9,000 to R15,000 range is the most active. Tenants and landlords are finding themselves facing similar increases in living costs, thus we do see an upward movement in rental amounts, but mostly it seems to be on par with CPI.
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