The property market in Gauteng and the northern region of South Africa remains generally steady, however some areas have experienced a drop in sales recently.
Demand
South African real estate agency Seeff reports that there has been a continued demand for property this year in the northern regions of South Africa. However, a few areas have experienced a drop in sales, with homes taking longer to sell and a more cautious approach from buyers and sellers entering the market.
These decreases in sales are mostly like due to one of the following factors:
- An unstable political and economic situation
- Interest rate hikes
- Increased transfer duties
- Fear of job loss
Another factor that could influence residential sales in these areas, is a growing trend amongst homeowners towards renovating their homes instead of buying a new home. It’s more cost-effective, in our current economy, and is a less risky decision than selling a home and buying a new one. Also, renovations will often result in a home being valued higher, when the time comes to put it on the market.
A factor that also could be contributing towards fewer people investing in property is overpricing of stock coming on to the market. While the more expensive property sector has taken a knock, homes priced between R800 000 and R2 million still have a steady demand.
Seeff branches in northern areas have demonstrated that selling a property in this market is still doable, provided the price, location and conditions are right. With the right price, location and conditions properties can even be sold within a day.
Types of property
Freehold homes:
According to Seeff, there is a large demand for freehold houses in the northern regions, provided that they are priced correctly. Freehold homes are popular amongst families, while first time buyers and investors buy into sectional title schemes instead.
Estates:
Properties in the R1.5million to R20million price range in estates sell fast, due to the higher level of security within estates. These homes remain great investment opportunities, particularly in areas like Centurion.
Luxury homes:
Areas such as Sandton and Pretoria East continue to have a demand for homes up to R50million. According to Lightstone, since 2013 about 30 properties valued over R20 million have been sold in these areas.
Cash buyers
Nelspruit is seeing a large increase in the number of cash buyers and areas like Sandton see more cash buyers due to the large number of sectional title properties.
Rental property
The demand for rental property also remains high, especially for two bedroom homes that are pet friendly and priced below R10 000 per month, but some corporate rentals can fetch prices of up to R80 000 per month.
In towns like Secunda, Rustenburg, Middelburg and Witbank the rental market is slowing down due to uncertainty in the market and mines in these towns closing down, causing job losses.
Nelspruit and Secunda are in need of new developments to address the issue of rental demand outstripping the amount of rental homes available.
Even though South Africans face tough economic times, the property market in the north remains relatively steady, and rental demand remains high, provided that the location, condition and price are right.
