PROPERTY: Gauteng Property Prices on the Up-and-up As Knock-on Effects Of Gautrain Boost Market
Recent Gauteng Business News
Gauteng property prices on the up-and-up as knock-on effects of Gautrain boost market
With 11 stations and 80 kms of railway network linking Johannesburg’s commercial nodes to those of Pretoria and Oliver Tambo International Airport in Ekurhuleni Metropolitan Municipality, the Gautrain connects key urban nodes in the Gauteng City-Region and transports more than 50 000 passengers on a typical workday.
Dr Andrew Golding, chief executive of the Pam Golding Property group, says that at the time the Gautrain was being developed, some commentators expressed concerns about its possible impact on residential property values. These have all been but forgotten within the residential property sector where it has become a catalyst for further development and growth. “This is not unexpected as infrastructure upgrades are often a disruption at the time but once completed the positive effects make their presence felt. This has been the case with the Gautrain,” he adds.
One of Johannesburg’s fastest growing development nodes is colourful Rosebank, which has undergone considerable growth in recent years. Ongoing upgrades are being made to the precinct, some R7 billion being spent on the development of commercial buildings such as the Rosebank Mall, and the Gautrain station was completed and opened in August 2011. All of this development has assisted in stimulating the residential property market in Rosebank, which is booming.
“In the sectional title market, which makes up the bulk of the residential property market in Rosebank, the average selling price of homes has nearly doubled from R771 000 in 2010 to R1,5 million year-to-date. Rosebank is a sellers’ market, residential properties here being sold within weeks of coming to market. Property values have increased and some homeowners are holding onto properties in the hope that values will climb still further,” says Dr Golding.
“Well situated residential property within the Rosebank precinct is popular particularly among a younger ‘hip-and-happening’ set who are attracted to the cosmopolitan urban lifestyle that the area offers,” says Rupert Finnemore, joint area manager of PGP Hyde Park. “We are also seeing a growing demand for upmarket homes in the area. For the first time in many years, upmarket properties are being developed within Rosebank including The Caversham, which consists of two- and three-bedroomed apartments on Sturdee Avenue starting at R2.8 million, and Forty4 on Keyes’ stylish two-bedroom simplexes and duplexes that are being marketed from R2.95 million to R3.7 million.”
According to Finnemore, while the Gautrain development has had a positive impact on the area it would be a mistake to think it is the only reason why the area is thriving. It is a well positioned node close to Sandton and surrounded by good surrounding residential areas in which developers have invested substantially as part of the rejuvenation of the area.
“The Gautrain stations were strategically situated in order to ensure they reach the maximum number of potential passengers and create the greatest economic impact,” observes Dr Golding. “In other words, the sustainability of the transport service and city rejuvenation were considered key to the project’s outcomes. In both regards the rail network has been a great success.”
“Positioning the Gautrain stations within growth areas such as Johannesburg and Braamfontein, as well as Sandton and Rosebank, proved prudent and there is little doubt that this has had an important impact on surrounding areas. With traffic having increased steadily in Johannesburg in recent years and the introduction of the toll roads, many people want to live close to their places of work or within easy reach of the Gautrain, which is proving an increasingly popular transport option.”
“From a residential property perspective, we have seen the demand for property intensify in some areas around the Gautrain stations, with a corresponding increase in the development of new or revamped accommodation in all of these areas. The impact on the residential property market generally tends to radiate out from the stations with the greatest impact felt toward the centre,” adds Golding.
Hyde Park joint area manager, Jonathan Davies, says Braamfontein, which has become a booming and dynamic part of town, is a good example of an area that has benefited from the development of the Gautrain. With a wide variety of coffee shops, restaurants, boutique clothing stores, bars, markets and art galleries a feature of the neighbourhood, Braamfontein offers residents easy access to a colourful street life and investors have gained increasing confidence in the area in recent years. Many apartment blocks have been, or are in the process of being revamped, and quality residential properties are available at affordable prices and rental rates.
Davies notes that the rejuvenation of the area is in no small part due to initiatives such as the Braamfontein Improvement District, which saw property owners join forces a decade ago to work on revitalising the area. “However, many people who are settling in Braamfontein are certainly taking the location of the nearby Gautrain station into account and we believe that it is playing a role in stimulating development within the area.”
Many residents of Johannesburg’s rejuvenated CBD have also observed that they appreciate the easy access that they have to the Gautrain. The Rea Vaya Bus Rapid Transit System (BRT) provides a fast, safe and affordable transport system throughout the city and to the train station.
Davies says that properties in Braamfontein represent a stable investment. According to the property research company Lightstone, the average apartment in Braamfontein fetched R4.3 million in 2013. With many investors taking advantage of the urgent demand for accommodation In Braamfontein, the buy-to-rent market is strong in the area. A 25sqm apartment generates rental income of around R3 500 per month.
Davies adds that the Sandton CBD has seen considerable densification in recent years and the development of a number of high-rise executive apartment blocks such as The Michelangelo and Sandhurst Towers is evidence of this. Apartments in the CBD of Sandton are marketed from R1.7 million and have been listed for as much as R60 million.
Says Davies: “Development in the area is ongoing, with office and retail property worth billions of rands continuously being built and road and transport networks being upgraded. The Sandton Gautrain station is a destination station for the Sandton city centre, offering a high-speed rail link with a 20-minute travel time to OR Tambo International Airport and links to Soweto, Johannesburg and Pretoria.”
The station has further stimulated the already rapid growth that has been occurring in the area in recent years and a number of developers are taking advantage of the opportunities it offers. Just one example of this is the innovative Sandton Eye, a mixed-use development that is situated across the road from the Sandton Gautrain station.
Sandton Eye includes offices, retail space and the five-star Radisson Blu Gautrain Hotel. Residential luxury apartments are also now being developed on top of the hotel and selling rapidly. According to Davies, the apartments are proving popular with executives and entrepreneurs from all over the world who work or do business in Sandton and want to be within easy reach of the financial centre of Africa.
“It is evident that the Gautrain is providing an important stimulus for the local economy and is having a highly positive impact on a number of residential property markets within the greater Johannesburg area. If current trends are anything to go by, this process is only likely to continue into the future,” concludes Dr Golding.
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