02 Aug 2012
The residential property market in Grahamstown – often referred to as the ‘Festival Capital’ due to its hosting a number of cultural and other events, including the recent National Arts Festival – is experiencing increased activity.
This is according to Daphne Timm, area principal for Pam Golding Properties (PGP), who says over the past financial year they have sold homes to a total sales value of R107 million, which reflected an increase in turnover of just over 57 percent.
She says sales during this period were mostly two to four bedroom family homes priced mainly between R450 000 and R1.75 million. During this period, while the top end of the market experienced little movement above the R3 million mark, PGP concluded all seven residential sales in the price band from R3 to R8.2 million – mostly around the R4 million mark, says Timm.
For the first quarter of 2012 they have concluded sales to the total value of R21 million, comprising an average selling price of R1.1 million, she explains.
“Considering that this period includes the traditionally quieter month of January as well as numerous public holidays in April, this reflects positive activity in the marketplace, coupled with our ongoing success in capturing increased market share."
She says since April they have seen a further uptick in general interest in the marketplace.Timm says approximately 40 percent of PGP’s sales in Grahamstown are to parents with children at private schools, who either relocate - while a partner commutes on business to major centres such as Cape Town, Johannesburg and Durban, or the couples use the property on weekends.
The balance are locals purchasing for a variety of reasons such as new young couples starting out, those upsizing as the family grows, or downsizing as adult children have left the family home.
Timm says in terms of their buyers they are seeing that finance has become somewhat more accessible, although first-time buyers are finding they need to spend a little more to acquire the homes they desire.
Because of the outstanding educational facilities in Grahamstown, including Rhodes University, as well as the appealing lifestyle, they attract home buyers from around the country, including those purchasing student accommodation or investment property.
With the amount of two bedroom apartments being built, you still find out of town investors buying, however, this increased supply of student accommodation has impacted on rental income, she explains.
However, while there is ample accommodation for students in Grahamstown, there are not many homes available for families and they could definitely do with a development such as an attractive set of townhouses being built for families as two and three bedroom, lock-up-and-go units in the price range from R650 000 to R1.1 million, she says.
“We believe this kind of complex living has high appeal and although developers have been looking at land, there are no real indications of such developments being planned,” says Timm.
She says the market still offers sound opportunities to get into the market, and acquire an investment property with good rental income. For example, you can acquire a two bedroom apartment for R565 000 and achieve rental income of R4 500 per month, she says.
There are some real gems currently on the market for those wanting a larger home for the family, such as a three bedroom family home priced at R1.65 million, and there is a really good buy situated right on the doorstep of a private school, a four bedroom home priced at R2.1 million, she says.
Grahamstown is fortunate in that they tend to experience a sustained demand for homes, so homes in good condition continue to increase in value, says Timm.
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