PROPERTY: Low Maintenance Lures in Big Buyer in JHB
Recent Gauteng Business News
The average home sale price in Johannesburg is now around 5% above the national average – and it’s mostly because volumes have picked up at the upper end of the market.
So says Lew Geffen, chairman of Sotheby’s International Realty in SA, who is “very bullish” about the prospects in 2011 for the market sector in which his company operates, where the average sale price is around R2,5m.
“In 2010 we saw volumes increase in this sector by 30% and prices move up by around 8%, with the third quarter being particularly encouraging, and we expect this positive trend to continue in 2011.
“The market has really bottomed out now, lending has loosened up somewhat and pent-up demand among those looking to upgrade is starting to come through. What is more, the buyers coming into the market now are real quality – and we are seeing a bond application refusal rate of just 4%, compared to an average of 15% historically.”
Looking at specifics, Geffen says that apart from access to finance, he expects the two major market drivers in 2011 to be property operating costs and convenience. For a start, his sales records for the past 12 months reveal a clear and growing preference among buyers for suburbs – and particularly gated communities – comprised of lower-maintenance properties on smaller stands, even at the upper end of the market.
“In Johannesburg, for example, there is much less demand now than there was two or three years ago for trophy properties on very large stands in suburbs such as Hyde Park and Sandhurst – although the resistance does not appear to be a question of purchase price. Wealthy buyers are often quite prepared to pay as much for a modern, low-maintenance property in a top estate as they would for one of these older suburban mansions.
“At issue is the time required to manage the upkeep of a very large property, and the ongoing costs of running a large establishment. Estates offer the benefits of shared resources as well as managed services, which not only frees homeowners from individually having to oversee the upkeep of the grounds, but also means that by sharing the cost they can, for example, acquire really high-tech security systems.”
Another big trend, he says, is relocation to avoid traffic congestion and reduce commuting times and distances. “And this will definitely benefit those traditional suburbs and the newer mixed-use estates and cluster complexes that offer proximity to good schools, shops, sports facilities and entertainment venues, particularly if they also enjoy good Internet and cellphone coverage to enable telecommuting and the establishment of home-based businesses.”
Business News Sector Tags: Property|