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Gauteng property market picks up

06 Sep 2010
Gauteng is seeing increased residential sales in 2010 with cash and investment buying growing strongly.

The price news emanating from the City of Gold is still somewhat dispiriting if you’re a homeowner or seller, but encouraging is you are a buyer or investor.

The Gauteng division of Pam Golding Properties (PGP) has had an outstanding first six months of the year in spite of a slow housing market, and prospects for the full year look excellent, says Dr Andrew Golding, CE of the national real estate group.

“Our Gauteng residential sales of close to R2bn in January-to-July this year (2010) are considerably ahead of forecast, but are also significantly up on the same period last year. “Notably, year-on-year (y/y) unit sales have increased by as much as 30%,” he says.

Golding says encouraging recent trends in PGP’s operations in Gauteng are an increase in cash transactions and the re-emergence of investor buying – the latter in particular having been virtually absent for some time.

“Canny investors often sense that the market has bottomed out and that the risk of persisting with a wait-and-see strategy is higher than the risk of investing now for maximum possible return.”

Gavin Bouwer, Broker/Owner of RE/MAX 2000 which services the western and north western suburbs of Johannesburg, says that sales volumes in 2010 have shown a 40% to 50% increase over the same period last year, even though prices have remained depressed, and in some instances even dropped.

Bouwer says entry-level units start at about R300k while older houses in Florida, Maraisburg, Triomf and Newlands that require some attention sell from about R600k.

Upmarket, older homes that are situated on larger stands in the areas of Florida Park, Florida Hills and Floracliffe range from R1m to R3m and even more. The same applies to Constantia Kloof, Kloofendal, Ontdekkers Park, Honey Hills and Horizon Extension. “All these suburbs have view-site sections on the ridges which command higher prices, depending on age, stages of renovation and the like,” says Bouwer.

Mid range to up-market properties situated slightly further west in Helderkruin, Wilro Park, Roodekrans and into Krugersdorp’s northern suburbs start selling from around R800k. Bouwer says more modern suburbs lie in the north-western region, which includes Strubens Valley, Allens Nek, Wilgeheuwel, Ruimsig, Honeydew Ridge and Radiokop.

In these areas, he says, there are a variety of sectional-title units available from two-bedroom homes with one bathroom that sell for approximately R500k to free standing townhouses with three bedrooms and a double garage that sell from R800k upwards. Randpark Ridge, Sundowner and Northwold and surrounds also offer a variety of homes more or less within the same price ranges as above.

“Northcliff, Fairlands, Blackheath and surrounds are generally more expensive through the range of property types. They offer easy access to the highway, and educational facilities along with a range of amenities and businesses that are also easily accessible.”

Bouwer says Fairlands and Northcliff have seen a prevalence of sub-divisions and rezoning, due to the fact that properties in these areas were placed on large stands. “Many Fairlands stands now accommodate up to six up-market townhouses. However, the council’s lack of being able to guarantee electrical connections for probably the next two to three years has put a dampener on further developments of this nature for the time being.”

He says renovations have become very popular as the cost of selling and relocating has become very high. “Families that are settled and happy in the area see renovating as a viable alternative even adding a cottage or flatlet as an income-producing possibility, or with the aim of housing aging parents or young adult family members,” he says.

Bouwer notes that the costs of maintaining large properties with swimming pools etc, especially with the council’s exorbitant rates and service fees, has necessitated that many families downsize, which in turn has created a good demand for quality cluster homes and similar properties in developments.

“Going forward I foresee a steady market with the oversupply being taken up, eventually leading to stable prices. I anticipate a moderate value growth of between 3%-5%,” Bouwer concludes.

Golding says in line with the rest of the country, the Gauteng market is emerging from a recession-induced inertia that saw sales volumes drop by as much as 50%, and prices by a relatively moderate 7% to 10%, over the past two years.

"However, there are patches of opportunity in the market – not least in the traditionally higher-priced areas of the northern suburbs of Johannesburg, and in the equally upmarket areas in the east of Pretoria, which continue to attract buyer attention because of their aspirational qualities," says Dr Golding.

“Residential developments in the vicinity of Gautrain route stations – in areas such as Rosebank, Sandton, Marlboro, Midrand, Centurion, Hatfield (Pretoria), and Kempton Park – are also attracting attention.

“These areas are likely to continue to appreciate at greater than the market average because they will offer the end user a combination of convenience and contemporary living,” says Golding.

Another market segment that is holding up well in Gauteng is walled, gated estates, where the decline in home sales prices has been less pronounced; where the gap in supply and demand is distinctly narrower than average; and where the rate of distressed sales has been comparatively low.

“The reason for this can be summed up in one word – security. Homes in these estates are generally priced at a premium because of the safe freedom of movement that they offer,” says Dr Golding.

“As sellers begin to appreciate that there is little prospect of significant price growth this year, more and more homes will find their way onto the market – presenting opportunities for buyers that may not be repeated for some time to come,” he concludes.

Moreover, the first home at the much-anticipated Eye of Africa development in the south of Johannesburg has come up for sale.

Priced at R4,750m, on a stand of 694sqm, this double-storey home offers 400sqm of accommodation. It includes four bedrooms and three bathrooms and is well positioned near the clubhouse. There is also a guest cloakroom, lounge, dining room, chef’s kitchen, family room with bar, pajama lounge, study, spill-over pool and double garage, all controlled by state-of-the-art home automation.

“The owner bought the stand from the developer, and he was one of the first owners to build,” says Shawn Mackrell, master licensee of Seeff Johannesburg South. – Eugene Brink

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