House prices have soared in South Africa’s most famous township. Do you know what your property is really worth?
Soweto has seen a surge in property prices over the past 10 years or so, but interestingly, it appears that many of its residents remain blissfully unaware of just how much their properties are really worth.
“Most properties in Soweto are family homes that house extended families,” says Trish Luthuli, new business executive Pam Golding Properties Gauteng. In many cases ownership is passed along within the family. As a result many people's ideas on the value of their property are not based on actual real estate values, and they are not aware of how much their properties have appreciated over the years.
To give you an idea of escalating values, Lightstone statistics reveal that in 2005, the average price for a property in Dube was R60 000, while property in this area now averages out at R450 000. Likewise, 10 years ago buyers would have paid an average of R305 000 for a home in Diepkloof, while the average price of a home in this area is now R790 000.
Luthuli says that at this stage the average price for a property in Soweto is R620 000. “However, we are seeing increased activity in the area and there is strong demand for homes priced up to R750 000. It's now possible to obtain a two-bedroomed home with a garden for approximately R750 000 in an area such as Meadowlands. More upmarket homes between R1.5-million and R2-million are also popular, and many residents in this price bracket prefer the colourful community vibe of Soweto to that of Johannesburg's residential suburbs.”
It stands to reason that those who aren't aware of the true value of their homes, run the risk of underpricing their properties when they sell.
“The recent interest rate hikes and increases in household costs may have a somewhat of a dampening effect on the housing market in the area,” say Luthuli.
However, with increasing urbanisation and a growing black middle-class, homes across all price brackets in Soweto are likely to remain in demand and represent a sound investment.
Anyone who is considering selling or simply wants to get some idea as to what their property is worth should contact a local registered estate agent for advice. Luthuli says there are a number of real estate agents who will be happy to provide free evaluations which will give homeowners an idea of what similar properties have sold for recently. It pays to remember that agents take various things into consideration when valuing a home and the value will depend on aspects such as the size of the property, improvements to the home as well as the area in which the property is situated.
“Once homeowners become more aware of the value of their property, they can be empowered to see it as an asset, which can provide them with further options and assist in wealth creation,” says Luthuli. “This may also spread the awareness of how important it is for homeowners to participate in activities that add value to their communities, such as street cleaning, paying of rates and taxes, actively engaging city authorities, and renovating and upgrading common areas.”
Take a journey through Soweto neighbourhood here:
