PROPERTY: Housing Markets in Inland Regions Recover Gradually
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And, as she points, out, in the prevailing more restrained economic climate, consumer emphasis is on value for money, coupled with affordability, which is where many of these central or inland regions have much to offer.
Says Daniel: “Some inland areas were hard hit by the recession. Dramatic job losses in 2008/09 had a significant detrimental impact in provinces where mining and manufacturing was severely affected. As these sectors have embarked on a path of recovery and conditions stabilised there has been a gradual improvement in the number of homes changing hands. As a result, our franchise network operating in these inland provinces has seen an increase in sales value of 20 percent, year on year, for the period 1 January to 31 May 2011.
“Property markets in towns such as Krugersdorp, Klerksdorp and Carltonville, so dependent on the gold mining industry, experienced dramatic shrinkage. However these areas are currently experiencing a slow recovery, albeit to a large extent very dependent on bond finance from banks.”
Looking back at the mining industry, she says in 2007/08 the platinum price spiralled with the demand for commodities, at a time when the new vehicle market was also experiencing an upsurge. During that period, towns such as Rustenburg, Brits, Lydenburg and Burgersfort experienced unprecedented growth and demand for housing, with new suburbs springing up and hundreds of houses coming onto the market. “Then as the American sub-prime housing bubble burst, the demand for platinum took a nose dive, with platinum-centric towns experiencing job losses and cutbacks, with a concomitant curtailment in the demand for homes to purchase. Together with the recent recovery in the demand for and price of platinum, this year (2011) we are seeing a good recovery in the demand for homes in the above areas.
“A factor impacting positively on the housing market in these inland areas has been the increase in demand for coal, both to export and to fuel the new power stations to supply electricity to the nation. The building of the Medupi power station in Ellisras created significant demand for rented homes, and with Eskom building homes for their staff and workers, this has further impacted positively on these areas. These are long term projects which should continue to fuel the growth in Ellisras, as well as Witbank and Bronkhorstpruit – with the Kusile power station coming on line around 2015. While Bronkhorstspruit has not enjoyed the benefit of new housing, there is great demand for rental properties,” says Daniel.
She says housing markets where well priced housing is available, such as the East Rand in suburbs like Benoni, Boksburg and Kempton Park, remain extremely resilient and offer sound value for money, despite having to compete with older suburbs with good infrastructure that includes schools and shopping centres.
“Generally in the inland regions there’s a gradual improvement in the number of homes changing hands and while initially prices remained around R1 million and below, since 2010 this price band has increased to properties over R1 million. However, there is still considerable stock on the market due to some homeowners being under financial pressure – a factor which is helping keep the lid on rising prices.
“In 2011 we are also seeing increased activity at the top end of the market, most likely attributable to astute investment by purchasers with cash as leverage in their negotiations. On a further positive note we are noticing that the demand for second homes is beginning to return as families seek a recreational outlet. As a result the demand for country homes and farms has shown a marked increase in towns such as Dullstroom, Clarens and the Vaal Dam and Vaal River areas. We are also seeing a migration of retirees from large metropolitan areas to small country towns where there are lower cost home options, a good community life and a slower pace,” says Daniel
Business News Sector Tags: Property|