08 Aug 2013
While South Africa’s Black Diamonds continue to move into the more affluent suburbs, it is largely the affordable and middle-class suburbs that are attracting increasing numbers of the country’s so-called Black Middle Class (BMC).
This is according to Seeff’s branches nationwide. Earlier this year, the UCT Unilever Institute of Strategic Marketing reported that the BMC had more than doubled over the last eight years to around 4.2 million in 2012, up from 1.7 million in 2004.
Home buying among this group is also improving according to the latest FNB Estate Agents Survey. It indicates that previously disadvantaged buyers now account for more than half (53.5 percent) of all home buyers with BMC buyers making up about 32 percent, up from about 23 percent in 2005.
A survey of Seeff’s more than 200 branches nationally confirms that there is a notable shift in buyer demographics in the more affordable and middle-class suburbs in the main metropolitan areas. In some instances, more than half of all buyers are now from the BMC demographic group, says Seeff Chairman, Samuel Seeff.
The most active price band is between R500 000 and R1 million and most buyers look for neighbourhoods with good infrastructure including transport and access to schools.
The importance of home ownership cannot be overemphasised, says Seeff. It is the foundation of a stable society and vital to economic stability. It creates security and wealth and, while the positive shift in home ownership within the suburbs is encouraging, the macro-economic landscape is a real impeding factor.
Despite the fact that home ownership is the most affordable that it has been in over three decades, access to finance and the ability to save for a deposit is a major challenge for prospective buyers. While many have the liquidity to service monthly bond repayments, they struggle to get a lump sum together and 100 percent loans, especially for first-time buyers will go a long way to addressing this, he adds.
Within the Cape metropole, some of the most notable shifts in suburban home ownership are in the northern suburbs. Areas such as Kuilsriver and especially Vredelust where homes sell for around R500 000 to R600 000 on average, now attract more than 60 percent BMC buyers, says area agent, Daniella Palmer.
Many work for Eskom and get home loans, something that is really helping. She says they are even beginning to see some buy-to-let buying.
According to area principal, Ryno Beck, Bellville and Parow are also on the shopping list of BMC buyers, largely for its affordable homes priced between R700 000 and R900 000. He says this is a growing buyer demographic, but access to finance remains a barrier.
Johann Groenewald, Seeff’s principal for the area, says Goodwood, one of the most centrally located suburbs is another area that has seen an increase in demand, largely for its affordability, excellent infrastructure including good schools and work opportunities. Sectional title units priced between R300 000 and R600 000, and family homes in the R700 000 to R1 million price band have been the most in demand.
In the greater False Bay area, Mitchell’s Plain, where homes are selling for on average between R300 000 and R500 000, has seen the highest prevalence of BMC buyers moving into the area, says Seeff’s manager for the area, Gary Grobbelaar.
Johannesburg’s southern suburbs have seen the largest shift in home buying according to Seeff’s principals for the area, Shawn and Toni Mackrell. Aside from the good infrastructure and transport networks, the area is also favoured for its close proximity to Soweto. With average house prices of between R500 000 and R800 000, suburbs such as Naturena, Ormonde, Meredale, Alan Manor, Kibler Park, Mondeor, Ridgeway, Crown Gardens, Southdale and Robertsham have all seen a significant rise in BMC home ownership.
In the more upper-class suburbs like Glenvista, Mulbarton, Bassonia and Meyersdal where homes typically cost between R1.5 million and R3 million, they have seen a shift of about 25 percent to BMC buyers. Upmarket security estates such as Aspen Estates, Eye of Africa, Bassonia Rock, Meyersdal Eco Estate and Meyersdal Nature Estate are also attracting BMC buyers looking for an exclusive and secure lifestyle.
According to Seeff’s principal for the area, Tony Ketcher, the greater Randburg area too has seen a rise in BMC buyers. Most are middle-income earners that work in the financial and corporate sectors in the Sandton and Midrand areas. Affordability remains vital with the R500 000 to R1 million price range being most in demand.
Centurion area principal, Steve van Wyk, says more than half of all buyers in the area are now from the BMC demographic group. Especially government employees that qualify for housing loans have been buying in middle-class suburbs such as Lyttelton, Wierda Park, Eldoraigne and even in upmarket gated estates such as Midstream, Cornwall Hill, Blue Valley Golf Estate and Irene Farm Villages Estate.
The bulk of sales are in the R800 000 to R1.5 million price range, but upper-income buyers are paying up to R6.5 million for a luxury home in a secure estate. Aside from the excellent infrastructure and schools, the central location and access to Pretoria, Midrand and Johannesburg is a big draw card.
While still only constituting about 20 percent of buyers in Sandton’s suburbs, areas such as Bryanston and Dainfern are a popular option with upper-income and Black Diamond buyers, says principal, Charles Vining. Both of these suburbs are home to a number of secure estates with prices that range from around R4 million up to R20 million for a top-end luxury home. The close proximity to the Sandton CBD and selection of private schools in the area, add to the attraction, he says.
Close to 60 percent of buyers in the Richards Bay area on the KwaZulu-Natal North Coast are now from the BMC demographic, says area principal, Silven Chetty. A big driver of the demand is attributable to six major industrial companies in the area that employ close to 5 000 employees. There is significant demand, but many prospective buyers are battling to secure finance, a major barrier to home ownership, he says.
Seeff’s Polokwane principal, Manie Oosthuizen, says the deposit requirement is a big challenge for BMC buyers in the area. Many of them have the liquidity to afford the monthly bond repayments, but just cannot get a deposit together and trying to save for this will take years and, by then, property prices will probably make homes out of reach. While we understand the need for a deposit, waiving this for first-time buyers with excellent credit records certainly will go a long way to facilitating more home ownership.
While holiday and investment home buying remains on the low side, Seeff Knysna principal, Billy Rautenbach, says there has been good interest especially from professionals in the Pezula developments with a few vacant stands selling recently. Many of the buyers that they are working for require mortgage assistance and getting bonds is a real drawback, she adds.
Seeff Dolphin Coast sales director, Tim Johnson, says the KwaZulu-Natal North Coast is one of the fastest growing investment and residential destinations in the country and especially the lifestyle estates in the area are attracting significant interest from BMC buyers.
Most in demand, are affordable and secure sectional title and freehold properties in estates such as Palm Lakes and Sheffield Manor while Black Diamond buyers are heading to the Zimbali Coastal Resort. Seeff recently concluded the highest residential estate sale in the last four years on the Dolphin Coast at R20.5 million to a Black Diamond buyer.
If you are using Internet Explorer 8 or higher, please verify that your Internet Explorer compatibility view settings are not enabled.
For the best browsing experience, update to the latest Version of Internet Explorer or try out Google Chrome or Mozilla Firefox.
Please contact our Property24 Support Team for further assistance. Tel. +27 (0)861 111 724