Author: Nadia Aucamp: Broker Manager at RE/MAX All Stars
David Naidoo: Pam Golding Properties Morningside Sectional Title Property Specialist
Peter Ash: Pam Golding Properties Area Principal in Roodepoort
31 March 2021
What R1.5m buys you in Gauteng
As Covid-19 pandemic and all the restrictions that go along with it, moves into a second year in South Africa, confidence levels in South Africa are understandably low in what lays ahead.
The commercial sector hit hard at the moment, as lockdown has made it extremely hard to survive in certain business sectors. Office rental space is also under major pressure as business owners realise that they do not need the amount of office space the used pre-covid-19, says Nadia Aucamp Broker Manager at RE/MAX All Stars operating in the Germiston & Alberton areas in Gauteng.
However, in the residential sector, Aucamp says confidence levels are certainly higher. Work-from-home policies, which many companies have instituted, has meant buyers don’t need to only buy close to their workplace. Adding to this is the fact that interest rates are at an all-time low, making property buying much more affordable. Even though the MPC (Monetary Policy Committee) decided last week to keep the repo rate unchanged, caution should not be thrown to the wind. Sooner or later rates will increase.
In 2020, more than 95 800 properties were sold in Gauteng according to Property24 Trends Data, with the average sale price for the province being R910 000. The average sold price for an erf in 2020 was R1 million, while a sectional title unit average sold price was R8250 000 for the same period.
The trend over the past five years with an average of over 144 000 properties sold per year (2015 to 2019), indicates a marked drop in registered sales for 2020. Hard lockdown took effect within the second quarter of the year, impacting the South African economy, and specifically the property industry’s ability to do business.
As a result, pent-up demand due to the Covid-19 pandemic and restrictive lockdown measures will continue to impact trends, with average sales per year only expected to recover towards the end of 2021.
The latest property listings on Property24 show that two- and three bedroom homes are most widely available. Some 39% of buyers interested in making Gauteng their home are below the age of 49-years. While sellers in the area fall within the 36-49 years (36%) and 50-64 years (30%) age group.
Aucamp says in the sectional title segment you can pretty much buy in any area in Johannesburg or Alberton, the options of a two- or a three-bedroom unit are certainly available.
In Alberton when it comes to full-title suburbs like Albertsdal, Mayberry Park, Verwoerdpark, Brackendowns and certain parts of Brackenhurst are good family option. Complexes with a higher number of units are able to offer lower levies and this is found to be a big deciding factor when determining where and what to buy.
“In Brackensdowns for R1.385 million, you can snap up a three-bedroom, two bathroom property on a stand size of 966sqm with a pool.
“In Albertsdal for R1.495million your options increase to a four-bedroom, three-bathroom property with a stand size of 1 028sqm.
Morningside is a sought-after area mainly because it offers a range of properties from entry-level apartments in secure complexes with standard facilities like swimming pools and clubhouses.
Most buyers in the sub R1.5 million price range have been predominantly renting and now are taking advantage of the lower interest rates being offered.
“This buyer population has not paid levies and rates/taxes before and are hard-pressed to keep their monthly spend close to what they’ve historically paid as tenants. They tend to be put off complexes where levies are higher than R2 000,” says David Naidoo, Pam Golding Properties Morningside sectional title property specialist.
A 55 sqm, one-bedroom apartment with one bathroom and covered parking in these complexes start from around R700 000. A two-bedroom apartment with one bathroom around 60sqm sells for around R850 000 but these complexes also offer the basic facilities. While fair sized two-bedroom, two-bathroom apartments sell for around R1 million.
According to Naidoo one can find a three-bedroom apartment of around 120sqm for up to around R1.5 million in the older apartments but the more modern high rise apartment blocks sit in the over R2.5 million price range. The Gautrain bus route which runs along Rivonia road from 12th Ave down through to Sandton Gautrain station also has a factor influencing buyer decisions. Schools are a prerequisite for buyers with school-going children. Grayston Preparatory School, Lycee Jules Verne French International School, Redhill School and Crawford schools are offered in the area.
“For R1.5 million in Brenthurst or Dalview you can get a three or four bedroom well-maintained home with two bathrooms, garages and often a pool – and this may not be very modern but it will be a huge home,” says Shennaz Haffejee, Pam Golding Properties area principal in Brakpan.
“In some parts of Dalpark which is boomed off we have three-bedroom homes with two bathrooms for around R1.5 million – some of these are a little modern since it’s a newer area with younger people living here. Most of the areas have schools close by, Dalpark and Dalview are close to a huge shopping centre called Carnival Mall and the Carnival Casino and Hotel, also very close is the N17 highway towards Springs and Johannesburg.”
In Florida, Discovery, Witpoortjie and Horizon on can still buy freestanding homes below R1.5 million starting at R1.25 million. These are usually three-bedroom homes on large stands with big gardens and trees. Some of these homes still have beautiful pressed ceiling and parquet flooring. While they sometimes need renovation they provide solid investment opportunities for young families who don’t want to be in townhouses or apartments. Often the streets have large trees on the verges. There are still really good schools in these areas, says Peter Ash, Pam Golding Properties area principal in Roodepoort.
Wilgeheuwel has a range of townhouse opportunities starting at R650 000 up to R1.5 million that vary in size. Close to Curro and Trinity Little Falls it provides the ideal opportunity for a more modern living lifestyle. Some of these units have small gardens so maintenance is easy. Proximity to Hendrik Potgieter Drive allows owners an easy commute to Krugersdorp or the Highway. The beautiful Clearwater Shopping Centre has a fantastic array of shops and dining options.
“In these uncertain times we are in with Covid-19 and an uncertain economy caution should be practiced when buying your family home. Buying to a person’s maximum financial limit is probably not a good idea as certainly interest rates will rise again. These suburbs give potential buyers the option of good quality homes at reasonable prices. Property is still a good investment in South Africa. It affords families stability and I believe it is still a better option than renting. One advantage is that when interest rates go down so does your repayments where the rental payments will increase on average every year,” says Aucamp.
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