Despite concerns surrounding land expropriation without compensation, a weak rand, and a technical recession – the housing market, surprisingly, has some green shoots.
This is according to Dr Andrew Golding, chief executive for the Pam Golding Property group, who said that it is likely that the housing market will continue to show resilience going forward.
“Economic growth is likely to continue to be sluggish for the balance of 2018 and although forecasts are for slightly stronger growth in 2019, this will take time to play itself out into the property market,” he said.
“Generally speaking, this suggests that the local property market will continue to be tepid but with some areas of outperformance and excellence.”
He added that this can be seen in the Gauteng and Western Cape markets, which have been rebounding gradually since mid-2017.
FNB’s latest estate agent survey shows that Gauteng housing market remains the strong point in South Africa in terms of realistic prices and stability. Homes in Pretoria sell in just over 11 weeks – the fastest of all metros and considerably faster than the national average of around 16 weeks.
Notably, Pretoria is the fastest growing SA metro economy. According to the Global Metro Monitor, it now ranks 35th on a list of 300 of the world’s biggest metro areas. Pretoria has overtaken both Johannesburg and Cape Town with a 7.6% growth in employment and strong GDP per capital growth.
“It is encouraging to see that the housing market in Gauteng is showing signs of recovery, particularly in the north and in Pretoria,” said Bradd Bendall, general manager, real estate operations for Pam Golding Properties.
“Activity in the northern suburbs is slowly strengthening. After years of subdued/below par growth, property is more affordable and the market is balanced – laying the foundation for a recovery when the economy finally turns.
“In the Johannesburg and Pretoria metros we are seeing an upward trend in sales across all price bands and even experiencing stock shortages in high demand areas.
“It is likely that the appeal these areas hold for first-time buyers, namely affordability and the development of mixed-use properties, is ideally suited to the lifestyle of young professionals,” he said.
Right now there are a number of suburbs considered hotspots as they offer good value for money – including for investment purposes, said Bendall.
“These include areas in and around Sandton, Morningside, The Parks (comprising Parkwood, Parkview, Parkhurst and Parktown North), and for top-end homes, Westcliff and Bryanston,” he said.
“Locations such as Northriding and the greater Fourways area continue to be sought after as they are very affordable, in close proximity to major roads and highways and with numerous amenities on hand such as shopping centres, excellent schools and hospitals.
“In both these two latter locations, it is still possible to acquire property priced from R700,000 for sectional title apartments and from R1.8 million and R2 million for freestanding homes – including cluster homes.”
He added that Gauteng is also a region which attracts many international business executives who may reside in the country on secondment for several years at a time, as well as buyers from the rest of the continent.
This trend is especially evident in areas such as Fourways, Sandton, Sandhurst, Hyde Park and Houghton, and in brand new residential estates and developments in Dainfern Estate in Fourways and nearby Blair Atholl, and suburbs like Illovo, Inanda and Kelvin, which are close to Sandton CBD and OR Tambo International Airport, as well as in Pretoria, such as The Regency, he said.
“Developments that are the most popular are those with a unique appeal, for example, Sandton Skye has the benefit of hotel-like living, and this is the second tower in an already proven development.
“Park Central – currently under construction and set to become the tallest building in Rosebank – offers groundbreaking architectural design which will make it the most iconic residential building in Johannesburg,” he said
“In Hyde Park’s ‘One97’, some apartments are offering a guaranteed rental return of 9%, so these are sought after by investors.
“Capital on Park in Sandton also offers a guaranteed rental return on some units, plus buyers have access to all the hotel amenities, while One on Whitely in Melrose Arch enables buyers to enjoy the live, work and play lifestyle of Melrose Arch precinct, which is in demand from both investors and buy-to-live purchasers alike.”
There also a number of new major developments taking place in the Gauteng region.
“Worth noting is that we are seeing the construction of the first new residential block to be built in Hillbrow since the late 1980s with a 10-storey, 128-unit apartment block going up at an investment of some R40 million,” said Sandra Gordon, Pam Golding Properties senior research analyst.
The development, known as Kapteijn Corner, will be built on the corner of Kapteijn and Quartz streets in Hillbrow, with apartments said to be going for R2,500 a month. The development cost has been pegged at R40 million.
“This is no flash in the pan as savvy developers have been investing consistently in Johannesburg inner-city, refurbishing buildings and establishing neighbourhood improvement districts for several years.
“When the economy rebounds, creating a modest income boost for workers, then this area is likely to be Joburg’s next developmental frontier for investors and city planners,” she said.
She added that another major development worth paying attention to is the Sandton Gated development.
“We’ve already seen the success of Menlyn Maine, now construction has begun on Sandton Gate – a new R3 billion smart eco-city,” said Gordon.
“The first phase will see the construction of over 30,000sqm of mixed-use space, including premium-grade office space, a residential block and amenities like a gym. The Sandton Gate precinct is envisioned as an eco-friendly smart mini-city that will serve as a commercial and residential hub within the greater Sandton area.”