Province is most affordable for those entering the property market??
Gauteng is paving the way for first-time property buyers to take their places on the property ladder as the province’s affordability levels and realistic property prices outshine the rest of the country.
These buyers are also becoming an integral part of Gauteng’s residential property market, and are evidence of the province’s prominence as an important centre of Africa’s commerce and business, property professionals say.
A recent FNB Property Barometer revealed that the Johannesburg metro recorded first-time buyer estimates of 28.6% and Tshwane of 24.3%, which were sharply contrasted with those of other metros in the country, particularly Cape Town at only 8.02%.
The two Gauteng metros have even seen an improvement in their 2017 first-time buyer averages in the first nine months of the year, says FNB’s John Loos, with Tshwane rising from an estimated 23.75% in 2016 as a whole to 24.3%, and greater Johannesburg from 21.6% to 26.62% from January to September 2017.
In addition to first-time buyers being aided by affordability levels and house prices, Chris Hajec, Seeff’s managing director in Randburg, says developers with both a national and provincial scope have focused on key nodes in Gauteng to take advantage of the ongoing population explosion which has seen a million new residents move there in the past four years.
Together with downscaling retirees and investors, first-time buyers are “at the profitable centre of all the action”.
“Any one of these classifications of buyers has a significant stand-alone impact on the market, but with the similar price band and set of criteria common to all of them, together they represent a formidable influence on the real estate trends in Gauteng.”
Seeff’s principals in Gauteng’s major metros agree the most active price range for first-time buyers varies between R700 000 to R1.5 million.
The most favourable suburbs and areas include:
● Midrand, Sunninghill, Paulshof, and Barbeque Downs.
● Hurlyvale, Highway Gardens, Eastleigh, and Illiondale in the Edenvale area.
● Alveda Park, Kibler Park, and Mayfield Park.
● Winchester Hills, Ridgeway, and Ormonde.
● Northern areas in Boksburg, Ravenswood, Bardene, and Everleigh.
● Mahube Valley, some areas in Doornpoort, and Capital Park.
● Areas close to the Centurion Gautrain Station.
According to new Lightstone data, Soshanguve South recorded the highest number of first-time property purchases in 2017 so far, with about 1 300. Suburbs that follow are Protea Glen with just over 1 100, Riverside View with about 700, and Savanna City with about 650 buys this year.
Lightstone analytics director Paul-Roux de Kock says: “The age of buyers in Gauteng is between 18 and 35, and this shows the younger working class is investing in property in this province.”
First-time buyers have become an “increasingly important” part of the residential property market in Gauteng over the past decade. And while much has been said about the semigration of Gauteng residents to coastal regions such as the Atlantic Seaboard, Rupert Finnemore, Gauteng regional head for Pam Golding Properties, says the fact that the province remains one of the most important centres of business and commerce on the African continent is at times overlooked.
“Gauteng also attracts migrants on an ongoing basis from around the country and from around the world who seek economic opportunity in the region with as many as 300 000 people attracted to the province every year. This is why Gauteng is where most first-time buyers choose to purchase.”
Citing Lightstone figures that reveal that half of young buyers over the past 12 years have purchased residential property in Gauteng, Finnemore says the properties tend to be more realistically priced than in some coastal regions, making homes more accessible to the average individual or family.
“This has also meant well-situated properties potentially offer better returns on investment.”
The province’s first-time buyers come from “all walks of life” and purchase a variety of homes including freehold homes, cluster, and sectional title townhouses or apartments, says Finnemore.
Residential areas across the province, and homes up to about R2.2m, are “particularly popular” with first-time buyers. In the current economic climate buyers tend to seek maximum value and greater affordability, so location is as important as ever.
A growing middle-class in the province over the past 10 years is also generating demand for more affordable properties in areas such as Midrand, Randburg and Blairgowrie, and in former townships such as Soweto.
“Young up-and-coming professionals are also taking advantage of the opportunities available to purchase upmarket sectional title apartment developments in centres such as Sandton, Rosebank, Midrand and Menlyn in Pretoria. These new properties require no transfer fees and many can be secured as investments at affordable prices,” Finnemore says.
Although first-time buyers in Randburg have many options for affordable property and entry-level homes, Hajec says North Riding is currently the “epicentre” of such home buying activity with one-bedroom townhouses selling from R700 000.
There is also a micro-trend in Randburg’s more established suburbs of smaller developers taking advantage of the lack of affordable opportunities for first-time buyers to create profitable conversions.
“With an average price range of R1.8m to R2.3m for freehold property in these suburbs, we now see a new phenomenon of smaller, three to four-unit developments being created from single family homes in areas with flexible zoning which often incorporate the existing structure as one of the units or a part of several.”
Most northern Joburg and Midrand suburbs also offer options for first-time buyers working in Joburg, Sandton, Midrand or Pretoria as they offer easy access to the N1 and M1 highway interchanges, says Charles Vining, principal at Seeff Sandton.
“One or two-bedroom apartments can be bought in Midrand from R750 000 to R800 000 and two or three- bedroom apartments can be found in Sunninghill, Paulshof and lesser-known Barbeque Downs at prices under R1.25m.”
Most buyers are newly employed in the area and are starting their careers, he says.
Sectional title units in Greenstone Hill, Dowerglen and Edenglen are good first-time buys priced between R650 000 and R1.4m. In Kibler Park, the most popular price range for first-time home buyers is R650 000 to R950 000, though they can go up to R1.25m, Seeff property professionals say.
Glenanda offers first-time opportunities in the R600 000 to R900 000 range, and Benoni and Boksburg in the R700 000 to R1.5m bracket. Buyers in Centurion can find lock-up-and-go units in “newish complexes” located close to important roads and the Gautrain Station for between R700 000 and R1.5m, says Steve van Wyk, Seeff’s principal in Centurion.
Peter Mokwana, Seeff’s principal in Jacaranda, says a Mahube Valley home with at least two bedrooms, one bathroom and a lock-up garage, goes for R600 000 to R1.1m.