Real Estate Investor Magazine South Africa September 2013 | Page 23
REI Residential
Township House Price
Growth Ahead of Suburbs
Keeping Up Maintenance
Inter-Provincial Repeat Home
Buyer Migration Trends
Areas formerly classified as “Black Areas” under
Apartheid Era classifications have outperformed
the former White “suburbs” in terms of house
price growth for much of the period since 2006,
playing catch up off a very low price base. In the
2nd quarter of 2013, the FNB Former Black
Township House Price Index for Major Metro
regions rose by 8.4% year-on-year. This was mildly
higher than the 6.3% recorded for the entire
market in the six major metros (Ethekwini, Cape
Town, Nelson Mandela Bay, Ekurhuleni, Joburg
and Tshwane). Townships markets represent the
most affordable part of the residential market,
with an estimated average transaction price of
R281 953 as at the second quarter, and have
shown to be a bit more cyclical than the overall
metro residential market.
In recent months there has been a marked
increase in the number of people buying into
multiple unit developments, gated estates and
sectional title schemes – not for their own use
but as an investment. While this is a welcome
trend, it has to be accepted that it can lead to
problems, says Bill Rawson, Chairman of the
Rawson Property Group.
According to FNB, household mobility appears
to be rising over the long term, with a greater
portion of households relocating to more far off
destinations, predominantly for work purposes.
FNB’s research also confirms the Western
Cape’s apparent competitive advantage, given
the lowest percentage of repeat buyers leaving
the province, as well as by far the strongest net
inward migration rate of repeat buyers from
other provinces. It is not surprising as the
province’s economy is the second largest after
Gauteng, and also boasts the second highest
growth rate, slightly behind that of Gauteng.
Cape Town’s combination of good economic
opportunity along with a quality lifestyle
appears to be the winning recipe in attracting
both wealth and skills to the province in
relatively abundant quantities.
Valuable Input
The main problem, he says, is that certain
investors, while enjoying the current scenario
in which rents are rising fast year-by-year,
tend to be very slack about ensuring that their
properties – as well as those of their neighbours
and communa l g rounds – a re properly
maintained. “Today’s buy-to-let investor is
inclined to see his investment as being in much
the same category as a bond or share purchase.
He sees no need to be closely involved with it.”
Bill Rawson,
Chairman,
Rawson Property
Adrian Goslett,
CEO,
RE/MAX
“As a rule of thumb, I believe
that not less than 5% and up
to 10% of the rentals each
month should be set aside
for maintenance purposes.”
““It was not that long ago
that a desirable home
in a good location may
have sat on the market
for months. However,
that seems to have seen a
turn around with many
sellers receiving offers
in a much shorter time
frame.”
www.reimag.co.za
Samuel Seeff,
Chairman,
Seeff
‘There is a notable shift
in buyer demographics
in the more affordable
and middle-class
suburbs in the main
metropolitan areas.
In some instances,
more than half of all
buyers are now from
the black middle class
demographic group.”
Brian Wilkinson,
CEO,
GBCSA
“We are confident that
the green building
movement in South
Africa will continue this
upward trajectory and
that we will increasingly
see green building
practices becoming the
norm.”
Gerald Leissner,
Chief Executive Officer,
Arrowhead Properties
“We see the residential
market as an important
new avenue for growth.
And it offers great
diversification from
commercial property.”
September 2013 SA Real Estate Investor
21