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Send  Share  RSS  Twitter  10 Aug 2010

PROPERTY: East Rand Scores with Value for Money Homes

 





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Since the start of 2010 the residential property market in the East Rand has seen a turnaround with homes in Benoni, Brakpan, Boksburg and Kempton Park in demand as home purchasers prioritise value for money, says Nelson Ferreira, Pam Golding Properties East Rand area principal.

“For the trading period from January to May 2010 we concluded 64 sales at a total value of just over R57 million, compared with 47 sales at a total value of R39.5 million during the same period in 2009. In addition, we sold a shopping centre on the East Rand to a local investor for R6.8 million.

“Homes in these areas offer far greater value for money than those in Sandton and Bedfordview. For example, for R3.7 million you can buy a 450-500sqm home in Lakefield, Benoni on a 1000sqm stand with the best finishes available, which would cost in the region of R12 million if situated in Sandton.

“We are finding that access to finance has eased considerably. In Brakpan, homes below R600 000 are moving steadily with buyers obtaining 100 percent home loans. Similarly, in Benoni there’s a great deal of activity below the R800 000 mark with mortgages being made available, while buyers in the R1.3-R1.5 million price bracket are generally having bonds approved with minimal deposits required. There’s also considerable movement at the top end of the property market and we recently sold homes for R4 million and R5.4 million. In addition, PGP recently sold a home in Kempton Park to Bafana Bafana player Franklin Cale.

“It’s encouraging to note that many of the deals we are negotiating - which are often subject to the sale of the purchaser’s home - are being concluded, mainly due to the fact that sellers are being more realistic in terms of asking prices,” says Ferreira. “If a property is correctly priced it is selling in approximately three weeks, with a home in an upmarket suburb of Benoni, priced at R2.8 million selling for R2.7 million the very next day. What was interesting was that from this one transaction we ended up selling three homes in total as we sold the buyer’s previous home and also sold the home of the purchaser of that property – the reason being that each of these transactions was subject to the sale of the buyer’s home. The other two homes sold for R1.95 million from an asking price of R2.05 million in less than a month, and for R1.3 million from an asking price of R1.35 million in just four days. Our agents also sold another house in Atlasville, Boksburg, for the full asking price of R1.3 million virtually immediately. The property was listed on a Friday and during the showhouse on the Sunday we received three offers and concluded the sale,” says Ferreira.

In the Benoni suburb of Crystal Park, where the average house price is around R600 000, PGP sold five homes in one week - all in a similar price bracket, with one home sold at the full asking price of R420 000 and the balance sold very close to the asking prices. These homes sold between R565 000 and R760 000.
Ferreira says the Gautrain is also having a marked impact on the property market. With businesses increasingly seeking space in close proximity to the Gautrain stations, this also boosts the demand for residential accommodation in these areas. In Rhodesfield in Kempton Park, where a large number of homes have been purchased by a company for commercial business, with the benefit of exposure on the R21 corridor which runs from Boksburg to Tshwane, most of these sellers have in turn purchased a home - still in the East Rand region - through Pam Golding Properties. “The Gautrain has impacted positively on the East Rand, making it more accessible for business people commuting to Sandton, coupled with the fact that they can now afford the luxury of acquiring homes here at a fraction of the price in the north,” he says.

An interesting trend which has emerged in the East Rand region is that purchasers seem to be moving away from purchasing townhouses and apartments to freestanding homes. Says Ferreira: “We believe this is due to the fact that those living in sectional title complexes are now being billed individually in regard to rates and taxes. It seems that their monthly expenses have now increased, as reportedly in some instances, their levies have not reduced. As a result this purchase offering appears less appealing to them.

“Conversely, we are finding that interest in guesthouses has increased and in recent months we’ve sold three such establishments in the price range between R1.6 million and R2.8 million. The appeal of guesthouses in the area is further boosted by a new incentive scheme, the Tourism Support Programme, launched by the government in an effort to help stimulate the tourism industry in South Africa outside of the traditional hotspots.”

Ferreira offers a word of caution to sellers regarding the pitfalls of doing private deals with potential buyers. “While there are a number of things which can go wrong in such an arrangement – where no professional real estate companies are involved - recently we’ve become aware of situations whereby purchasers who do not have sufficient finance for a deposit and who do not qualify for bond finance, try to arrange a private deal with the seller after viewing the property. We’ve heard of instances where the seller has agreed to let the purchaser have a period of time, for example, six months, in order to accumulate the capital for a deposit and agreed to occupational rental in the interim. However, the unfortunate outcome is that the so-called purchaser does not come up with the money and as they are paying occupational rental the seller finds it difficult to evict them. “


 
 
 
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