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Nkomazi property market recovering

28 Apr 2015

The lowveld areas of the Nkomazi and Umjindi Municipal Districts in Mpumalanga are seeing a turnaround in the residential property market.

This is according to Pam Golding Properties (PGP) area principal, Gerhard van Niekerk, who says the Nkomazi region is situated between Swaziland and Mozambique, linking to the two countries via key transport routes, which include the N4 to the latter, thereby forming the Maputo Corridor. 

Situated in Komatipoort, this home offers four bedrooms, three bathrooms, a gym area, jacuzzi, swimming pool and built-in braai. It is on the market for R2.39 million – click here to view.

He says the time the business was launched, the residential property market in South Africa was in an unprecedented upswing, which peaked in 2007. The advent of the economic recession, ensuing credit crisis and sharp downturn in the residential property market that followed in 2008, is likely to resonate with consumers and investors for many years to come, he says. 

Although South Africa did not experience the extreme lows as was the case in the USA and the UK, the local market was severely impacted, he says. 

“Each of our local towns, during this volatile period, did not follow the same timeline, however, they followed the national trend whereby increased financial constraints on consumers resulted in a dramatic decline in housing demand, coupled with a significant increase in sales in execution, followed by a price rectification.” 

Van Niekerk says the acquisition of a home is generally the largest single asset the majority of people will ever own and, with more and more consumers aspiring to invest in their own homes, following trends in the property market is increasingly important and of interest to existing and potential homeowners. 

This Marloth Park house has two bedrooms, one bathroom, paved veranda, bush-braai area and security features. It is priced at R2.5 million – click here to view.

He says it’s interesting to take a look at the various areas in their region, where the bulk of their buyers are people moving into the areas from other regions, which constitutes about 70% of their total sales, with the balance being locals. 

The following only covers freehold ownership, with the exception of Barberton, where sectional schemes constitute a significant portion of the market. Van Niekerk says in Kamhlushwa and Kamaqhekeza, ownership is, in the vast majority of instances, in terms of the ‘Right to Occupy’, which is not traceable as it is not recorded in the Deeds Office. 

Sales in Komatipoort across all price ranges 

In Komatipoort, a town situated 5km from the Lebombo Border post to Mozambique and adjacent to the Kruger National Park, 47 registrations were recorded during 2009, declining to 36 in 2011 and recovering to 61 in 2014. In 2009, the average price per unit was R655 000, compared with R781 583 in 2014. 

This home offers six bedrooms, three bathrooms, a kitchen with piped gas, a veranda, swimming pool and security features. It is on the market for R3.26 million – click here to view.

Sales in execution peaked at eight in 2009, and again in 2010. Gradually recovering from the downturn, the total sales value over the past five years increased at a steady rate of 4.5% per annum. Van Niekerk says sales recorded were quite evenly spread over the price ranges from R0 to R400 000, R401 000 to R800 000 and R801 000 to R1.5 million. 

Notably, he says the majority of recent buyers (49%) fell in the 50 to 64 years age group, and 46% of recent sellers fell in the age group 36 to 49 years old. 

Pam Golding Properties’ (PGP) agent in Komatipoort, Alta Triegaardt, says her biggest challenge is to convince sellers to price their property correctly in order to sell at market-related prices. 

Van Niekerk says she experiences a lack of realistically priced stock in all price ranges. While sellers under financial pressure expect their home to compensate for their predicament, neither the buyer nor the financial institution financing the buyer shares this view. 

This Komatipoort home has four bedrooms, two bathrooms, air-conditioned lounge and dining room, a tiled entrance hall, flatlet and garaging for three cars. It is priced at R1.65 million – click here to view.

A neat property, priced correctly, together with a relationship of trust between seller and agent will undoubtedly lead to a successful sale, he says. 

Uptick in Marloth Park’s property market 

Van Niekerk says Marloth Park, situated in the lowveld bush with an abundance of wildlife, and with a large number of holiday or leisure homes, experienced a much greater dip during the recession, and recovered significantly better. 

In 2009, at 168, the number of registrations in Marloth Park was the lowest for the past 10 years, recovering to 311 last year. Sales in execution reached a high in 2012 at 28. 

The average price per unit increased slightly from R224 000 in 2009 to R259 000 in 2014, with total sales value reflecting an increase of 16.4% per annum over the past five years, and with the majority of sales in the up to R800 000 price range. 

The majority of recent buyers (42%) fell in the 50 to 64 year, and 42% of recent sellers were in the age group 36 to 49 year olds. 

Younger buyers face financing issues in Malelane 

In Malelane, 5km from Malelane Gate to the Kruger Park and 45km to the Jeppes Reef border post to Swaziland, PGP reports that 38 registrations were recorded in 2009, at an average of R752 000 per unit, totalling R28.576 million. 

“Last year, only 35 registrations were recorded, possibly due to lack of stock or stock in the right price range.” 

Van Niekerk says total sales value increased by 1% per annum over the five year period, with sales in execution peaking in 2011. Here, the majority of sales were in the R800 000 to R1.5 million price range. 

The majority of recent buyers, namely 48%, and 52% of recent sellers, fell in the age group 50 to 64 year olds. 

Van Niekerk says it would appear that the younger generation simply cannot access finance to acquire a home, or there is no stock in the price range for which they qualify. He says this is regrettable, as this area attracts young buyers with families, particularly entrepreneurs and others seeking job opportunities. 

PGP’s local agent in Malelane, Suzette van Staden, says available stock is not affordable for the average buyer. Sellers may take a while to become realistic in their price expectations, and during that time a number of opportunities to sell are missed as buyers simply move on. She says their advice to sellers is to consider the time value of money, a lesser amount in your pocket now is worth more than a higher price in the future. 

PGP is experiencing a strong demand for houses in the price range R600 000 to R900 000, as well as for vacant stands in the right area, which are usually priced at approximately R230 000 for 500sqm, with buyers then investing from R1 million to R1.5 million in building their new homes. 

Van Staden says this area also attracts retirees seeking homes between R600 000 and R900 000, however, such affordable stock is hard to find. She says there is also a huge demand for new residential developments, which presents an opportunity for developers to capitalise on, especially to cater for the buy-to-let investor, as rental stock is also in high demand. 

Young singles and families as well as contractors are seeking homes to rent mainly in the R4 500 to R8 500 per month price range, she says. 

Barberton buyers savvy regarding market-related prices 

In Barberton, PGP reports that the number of registrations dropped from a high of 458 in 2007, to 179 in 2009, reflecting a decline of 60%. Sales in execution reached a decade high in 2012, with a significant decline in 2013. The number of registrations last year was 284, showing an increase of 9.7% per annum over the last five years. 

In terms of property values, the average price for sectional title units increased by 7.3% per annum from R430 000 in 2009, to R612 000 in 2014, while the average price of freehold units increased from R184 000 in 2009, to R225 000 last year, reflecting an annual increase of 4.1% per annum. Van Niekerk says 44% of recent buyers and 38% of recent sellers fell in the age group between 50 and 64 years old. 

PGP Barberton agent, Patience Mnisi, says the market is also experiencing buyer resistance to unrealistic asking prices from sellers who may base the price of their homes on projected plans for their financial future. 

She says the prices of homes in successfully concluded sales have everything to do with current market value and what buyers are prepared to pay in the present market. 

She says they’re experiencing a strong demand for houses priced between R500 000 and R900 000. Houses in this bracket sometimes need some basic renovation or neatening to prepare for the market. 

“Most of our buyers come to Barberton from other regions seeking work at the mines, or on transfers. Contractors tend to move here on five-year contracts, some preferring to rent for the entire duration, unless they have children, in which case they look to buy a home.” 

Mnisi says the younger home seekers are mostly black buyers looking for an affordable stand so they can build their dream home at their own pace and to suit their pocket. She says they’ve recently spoken to two developers who came to them for an opinion while looking to build modern and affordable housing in the Dikbas area, priced at no more than R950 000. 

There is also a demand in Emjindini Extension 6 and 12 for homes selling between R400 000 and R500 000, however, the local municipality does not have available land.

 Mnisi says they also see a few retirees looking to buy smaller homes under R750 000 in a gated community. Rentals are also sought after, mainly up to R5000 per month, she says.

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