Home buying remains a top priority for many and for those who cannot afford to buy, renting is an option.
In Gauteng for example, Sandton’s commercial growth is leading to a significant spike in demand for rental accommodation.
According to Seeff Sandton, the sectional title buy-to-let market in Sandton is about to explode as the development will inevitably create demand for residency.
Charles Vining, managing director at the agency notes that new property developments in Sandton include commercial, residential and mixed-use.
“Property in Sandton Central is highly sought-after, especially for unfurnished sectional title and it seldom takes longer than two weeks to find suitable tenants for a well-priced sectional title unit.”
Vining points out that in the last year, they have seen a significant rise in demand for rental accommodation and with the continued commercial development they anticipate a steady increase in this demand.
“Since 2007 there has been a steady increase year-on-year of between 7 and 10 percent on monthly rental amounts.”
Tenants look for unfurnished two bedroom apartments priced from R8 000 to R20 000 per month, three bedroom apartments priced between R12 000 and R20 000 per month are also sought-after, he says.
Home to former South African President, Nelson Mandela, Houghton Estate is an affluent suburb in Johannesburg, north east of the city centre.
Adrian Goslett, chief executive officer of RE/MAX of Southern Africa explains that Houghton is informally divided by Houghton Drive into two areas, namely Upper Houghton and Lower Houghton.
The Upper Houghton region consists of a number of Johannesburg’s historically significant homes and buildings as well as some of the city’s wealthy homes.
According to WealthInsight data, High Net Worth Individuals (HNWIs) in South Africa buy homes is the Johannesburg’s top suburbs including Houghton boasting 15 HNWIs, Sandhurst (36), Bryanston (31), Hyde Park (26), Westcliff (20), Parktown (15), Dainfern (10), Atholl (5) and other (103).
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Goslett notes that since 2004 to 2006, property prices saw a steady but marginal increase, however, from 2007 until 2009 prices rose by much greater increments.
As of June 2013, the average price of a freehold home was R4.734 million, R9.950 million for estates and R1.141 million for sectional title units.
Goran Despot, owner of the RealNet Erasmuskloof real estate franchise in Pretoria reports that home prices in parts of Pretoria's eastern suburbs have increased with interest among home buyers now on par with levels last seen five years ago.
Located in Houghton Estate, Johannesburg, this four bedroom home is selling for R7 million through RE/MAX Central. Click here to view.
For example, Sterrewag bordered by Monument Park and Waterkloof Ridge has seen price growth of between 10 and 15 percent in some residential complexes thanks to increased demand.
Two bedroom sectional title units measuring 62 square metres are priced up to R965 000 from selling prices of R850 000 six months ago.
Demand in Sterrewag is mainly driven by double-income young professional couples, who are attracted by the excellent location relative to the R21 and N1 highways.
Historically low interest rates are further encouraging such buyers, usually in their early thirties, to enter the market.
“Qualified buyers with steady incomes and clean credit records are increasingly obtaining 100 percent home loans for properties that cost up to R1.5 million and not having to save for a deposit speeds up the entry to market for many young couples.”
However, he points out that 100 percent bonds are not yet as freely available as before the credit crunch and that strict criteria still apply.
Many young would-be buyers opt to rent while they save up deposits.
Sectional title rental units in secure complexes in Erasmuskloof command rentals of between R6 500 a month for two bedroom units and R8 500 for three bedroom units.
He says increased demand for rental units is also now drawing the attention of property investors with a medium-term view.
“Investors can expect rental returns of up to 8.5 percent currently with expected growth in property values over the next five to 10 years,” he says.
The Karoo covers almost 30 percent of South Africa and spanning four provinces.
In Pretoria East, a three bedroom townhouse in Sterrewag is on the market for R1.990 million through RealNet Erasmuskloof. Click here to view.
It is surrounded by the Kalahari in the north, Namaqualand and the West Coast to the west, Boland and Overberg on the south-west, Garden Route in the south, and the non-Karoo regions of the Eastern Cape and the Free State.
According to Wayne Rubidge, Pam Golding Properties manager for the Karoo, each of the 52 Karoo towns with their historic buildings, unique architecture and broad range of affordable and unusual investment property choices, offers something very compelling and different from the next town, and all are located in contrasting settings.
Take Phillipstown in the Northern Cape for example, here Karoo historic homes for sell for between R250 000 and R450 000, he says.
KwaZulu-Natal’s Upper Highway
According to Dave Jones, Seeff KwaZulu-Natal regional relationship manager points out that the fastest selling segment in the area currently is houses prices between R1 and R1.5 million as buyers continue to seek value properties.
Land sales which have been poor over the past 5 years have gained momentum, although 60 percent of land sales are priced below R500 000.
Jones explains that 77 percent of all property sales in the Upper Highway area in 2012 were in the under R2 million price bracket, with 56 percent in the R1 and R1.5 million range.
“In an area known for its extensive townhouse developments, freehold homes outstripped sales of townhouses in 2012 as families moved in for access to the excellent local schools,” he adds.- Denise Mhlanga