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 of 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 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 flatlett 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 many families to 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

"Location, location, location" are three words of advice that have been around for so long in the property industry that it might sound like a platitude.

But what exactly does this mean?

“Location refers to a number of factors that buyers should take into account before deciding which property to buy,” explains Adrian Goslett, CEO of RE/MAX of Southern Africa.

“These factors are crucial, because they affect the growth in the value of the property over time, which will determine the price that can be achieved if the property is sold in the future, as well as the income the property can generate if it is bought for investment purposes.”

First, and most importantly, location refers to the area in which the property is situated. “It is always better to buy a poor property in a good area, than to buy the best property in a bad area,” says Goslett.

“A good area is one in which there is growth and development, or significant potential for growth, which will support demand for property in the long term and, subsequently, determine property values in the future.”

Choose an area with a good infrastructure, which is reflected in the provision of services. Steer clear of areas where crime is high or areas in which neglect and poor service delivery is evident in the state of the roads, waste collection and general maintenance of pavements, parks and public land. “Buyers are also well-advised to find out more about the future development plans for the area. Developments such as new industrial sites, new roads or railways or industrial activities can significantly alter the profile of an area,” warns Goslett.

The neighbourhood should also be carefully considered because the quality of the surrounding properties will affect the value of an individual property. “Carefully consider a property surrounded by neglected or dilapidated properties, or situated next to vacant land, which could attract squatters or a low-cost housing development in the future. A property in a well-maintained developed area will grow in value because the supply of new properties is limited to the existing properties. This limited supply will also keep prices buoyant,” he says.

The state of surrounding neighbourhoods should also be considered, since development or stagnation in one neighbourhood or suburb tends to spill over into the adjacent ones.

“Growth and development can be seen in the level of investment and commercial activity in the area. Property developers and national retailers do thorough market research before considering an area. Residential and commercial property development within the neighbourhood surrounds indicates confidence in the future growth of the area.

“Similarly, well-maintained, clean shops with bright, modern storefronts, as well as long-established or well-known brand names are indicative of prosperous areas. Beware of neighbourhoods with neglected or empty shops, a collection of second-hand goods shops and poorly stocked, unbranded convenience stores,” says Goslett.

A second aspect of location is accessibility. Given the lack of public transportation in South Africa and the long distances most people drive to work and back, a good location encompasses easy access to highways and transport routes. “Proximity to Gautrain stations or bus stations will become more important as our country’s public transport services improve,” notes Goslett.

“However, proximity to the highway or the railway line could mean that the property is exposed to significant noise and pollution. Finding the right balance is therefore important in choosing a location.”

Annien Borg, MD of the Boland and Overberg regions of Pam Golding Properties, says when you start looking for a home to buy, in addition to affordability, give thought to your individual needs or those of your family so that you buy a property that suits your lifestyle.

“Do your homework on your selected area in regard to security/crime, distance from schools and workplace and access to shopping and medical facilities.

Ask the agent about recent sales of property in the area, the average selling price and growth in property values over the past few years. Also enquire if there is any future development planned for the area which could influence the price of the property negatively or positively. If you can, speak to those who already live in the area.

“Buying a home is one of the biggest investments you may make in your lifetime, it is well worthwhile to research the area and market before you look for a property, and ensure it is within your price range,” she adds.

“In essence, then, when you hear ‘location, location, location’, remember that this, in reality, refers to a confluence of different factors to pinpoint a property in an area that is growing and developing to sustain long-term value, while offering quality of life and convenience. Finding such a property may take a little more effort and time, but the future benefits of solid growth in the value of the property certainly makes it worthwhile,” Goslett concludes. - Eugene Brink