Boasting price growth of between 190% and 300%, the property markets of Sunnyside and Arcadia are witnessing unprecedented growth.
The two Pretoria suburbs of Sunnyside and Arcadia have over the past 10 years witnessed a revival in terms of property values. As demand continues to rise on the back of a strong rental pool and city authorities attempt to attract investment by launching incentives programmes for developers, these two outlying CBD suburbs are hot property for investors.
Arcadia and Sunnyside’s sectional title markets each averaged a selling price of R103 000 in 2004, while in this year average R369 000 – an increase of 258%.
On the full title front, Arcadia’s average selling price of R877 000 in 2004 has seen a rise of 300% to R3 592 000 today. Likewise with Sunnyside where full title properties increased by 190% during the same period, from R484 000 to R1 404 000.
“These suburbs were particularly popular during 2004 to 2007 when it was seen as an investment,” says Gerhard van der Linde, MD: Seeff Pretoria East, noting that the introduction of the National Credit Act slowed down buyers’ ability to purchase more investment properties. “Owners weren’t able to purchase second and third investment properties as easily as before. Many units came back onto the market, but the investors still had satisfactory returns on their investments at the time of selling their properties. There continued to be a growth in this market.”
Studying property database Lightstone, average valuations in both Sunnyside and Arcadia are higher than average selling prices being achieved, which suggests the market still has some way to go before valuations match buyer appetite.
“Property price growth over the past 10 years has been similar to what it has been elsewhere in the country. Between 2002 and 2006 the growth was great (our boom), but from 2007 up until now things have been very gradual and slow,” says Dale Purdon, director: Imagine Properties. “We believe this is improving right now and that steady growth will continue for the next few years to come. The one down side of the mini recession from 2007 onward is that the market is fairly flooded with over-priced stock as owners are trying to settle very high bonds which the banks were once willing to lend them when times were good (pre 2007). There is, however, a steady and current growth of at least 5% to 10% in certain areas and blocks.”
A tale of two suburbs
Sunnyside – sectional title ranking of 2033 out of 2290
Average valuation: R412 409
2015 average sales price: R369 000
Sunnyside – freehold market ranking of 605 out of 5765
Average valuation: R2 281 064
2015 average sales price: R1 404 000
Arcadia – sectional title ranking of 1933 out of 2290
Average valuation: R452 670
2015 average sales price: R369 000
Arcadia – freehold market ranking of 236 out of 5765
Average valuation: R3 509 849
2015 average sales price: R3 592 000
This article originally appeared in Neighbourhood, Sunday Times.
