Affordability of properties has seen the province become the favourite with those entering the market, and Joburg is now the favoured metro with consumers struggling with escalating living costs in a sluggish economy
As the desire to buy their own homes remains a dream for many middle-income South Africans tied down by the escalating costs of living, first-time Gauteng buyers are snapping up the opportunities.
During 2017, a total of 27320 Gauteng residents bought their first homes, a figure that strongly contrasts with the Western Cape’s 15705 and KwaZulu-Natal’s 8200.
Recent figures also show that of the main metros, Joburg has the highest levels of first-time buyers, and this is due to its “reasonable” property prices, says Rupert Finnemore, regional executive for Pam Golding Properties.
“We are seeing a lot of activity for properties priced under R2million and closer to the R3m range. It is a buyers’ market and we expect an increase in sales volumes and demand for properties, thus pushing up property prices, especially where there is shortage of stock.”
Finnemore says the Rivonia area, in particular, has seen “huge growth”, mainly due to the opening of Huawei, bringing many Asian cash buyers to the table. The property market in this area has “held up pretty well” despite slowing economic growth.
For the average first-time buyer elsewhere, those looking to purchase close to Sandton look in the R1m to R1.5m price range. Others choose locations such as the greater Fourways area, Midrand, Rivonia, and Sunninghill as it is still possible to buy one- or two-bedroom units for less than R1m.
“Rivonia is an up-and-coming area having seen recent new residential developments along Rivonia Road and within walking distance of the Gautrain bus station, Metro and Putco buses as well as minibus taxes, making it convenient even for buyers who don’t drive.
“First-time buyers also want to purchase in areas close to schools and other amenities such as shopping centres, hospitals and other places of interest,” Finnemore says, adding these areas are also “seemingly safe bets” in terms of capital gains and rental yields from an investment perspective.
For the singletons and young couples, a surge in sectional title developments in many areas in Joburg offers good opportunities for first time buys, says Grahame Diedericks, manager principal for Lew Geffen Sotheby’s International Realty in Midrand. These units range from studio to three-bedroom apartments with a growing number of estates offering an array of home options, lifestyle facilities, security and convenience.
“This bodes well for the first-time buyer as the competition between new developments has increased, and in turn offers better value with exceptional purchase incentives such as appliances and gym contracts.”
For families, where the priority is security and proximity to schools, Diedericks says there are many older and established estates and clusters in which they can purchase semi fixer-uppers or newly renovated homes for “reasonable prices”.
“There are also new estates offering the buyer open land to build their dream home. This can be a cost-effective solution but the building timelines need to be adhered to in order to avoid any penalties.”
First-time buyers in Joburg South can find “great value for money”, says Byron Caloyannis, Pam Golding Properties area principal for the area. This is one reason why the area has the highest levels of first-time buyers in the city.
“The other is the mindset change from tenant to paying off their own bonds. Parents are also investing in their children’s first properties.”
Average entry-level prices for sectional title properties is R550000 to R850000, he says.
Other first-time buying trends in the area include:
- Preference for two-bedroom properties over one-bedroom.
- Preferred prices from R2m.
- Mature buyers purchasing freehold properties under R2m throughout Joburg.
- Many buyers feeding in from Lenasia and Soweto.
- Homes often have many bedrooms.