Real Estate Investor Magazine South Africa June 2018 | Page 31

SPOTLIGHT
Johannesburg for Investors
Areas to look out for
T
he economic powerhouse of the country, Johannesburg
is home to a large number of first time buyers. Light-
stone data shows that half of all first time buyers in the
past 12 years bought property in Gauteng.
Pam Golding Properties Gauteng regional executive, Ru-
pert Finnemore, highlights Fourways, Bryanston and Rand-
burg as areas that offer a range of properties for all budgets
- something that makes them popular with first time buyers.
“Since first-time buyers are typically more sensitive to the
prevailing economic environment (as they are generally more
reliant on mortgages), the improved economic prospects this
year are likely to unleash pent-up demand from this sector of
the market,” explains Sandra Gordon, PGP research and mar-
ket analyst.
Sectional title developments are particularly popular with
this set of buyers, given the added benefits of security and
reduced maintenance. Compared to other areas in northern
Johannesburg, Fourways is established with many affordable
homes - and many new developments both in the residential
and commercial sectors.
Another popular area, according to Finnemore, is Midrand
where prices start from R500 000. A diverse range of entry
level homes in secure complexes to luxury homes in suburbs
like Waterfall Country Estate and Noordwyk make this an
alluring choice. “Property here is affordable for young people
and is also a great market for investors,” adds Finnemore.
John Loos, Household and Property Sector Strategist at
FNB, remarks that the Midrand-Diepsloot region has seen
cumulative growth of 26.17% since the end of 2012. “In
Gauteng’s housing markets there appears to have been a gen-
eral search for affordability in recent years, with solid 1st time
buying levels, driving stronger markets at the lower priced end
relative to more expensive sub-regions,” he explains.
While these figures seem unimpressive compared to Cape
Town, Loos explains that it’s probably a good sign: “We be-
lieve there to be a good chance that Gauteng’s underperfor-
mance in house price growth in recent years may have made it
the most realistically priced major region of the country (when
thinking house prices relative to income levels in the region),
which could turn it into a relative outperformer in 2018.”
According to the PayProp Rental Index Annual Review
2017, the province’s average rent has consistently been above
the national average, also growing faster than average. Average
rent in the province in Q4 2017 was R7 629 and grew by 5.8%
year-on-year. In contrast, the national average was R7 308
with a growth rate of 5.4%. The report also notes that nearly
40% of rentals in the province fall in the R5 000 to R7 000.
Rory O’Hagan, CEO of the Chas Everitt Luxury Portfolio
division, notes that there is a stock shortage looming in the
luxury sector of the Johannesburg property market.
“The main reason for this sharp increase in demand is, of
course, the dramatic lift in business and consumer confidence
since December and the changes in the ANC leadership struc-
tures which heralded the appointment of a new President.
However, sales activity over the past few months has also been
fuelled by the great value-for-money that has been available in
Johannesburg’s upmarket suburbs,” he explains.
Johannesburg’s status as business capital is also playing a
role, with a number of multinational corporations seeking up-
market accommodation. “Other main financial centres in Af-
rica are proving difficult to work in at the moment for various
reasons, and Johannesburg with its excellent financial infra-
structure, is once again bei