Upmarket buyers turn attention to cheaper suburbs
Residential suburbs near the industrial nodes of Silverton and Waltloo to the east of Pretoria are experiencing an influx of buyers targeting upmarket properties.
Dr Willie van der Merwe, owner of the RealNet WaterMeyer mini-franchise in the area, says many buyers are businessmen with interests in the industrial areas. They typically buy upmarket properties and have cash reserves, which considerably speeds up transactions.
Properties in the price range between R1,5m and R2m are popular and represent superior value when compared to similar properties in upmarket areas such as Waterkloof, where this class of buyer would previously have settled, says Van der Merwe.
Prices of comparable properties in Waterkloof are at least double that of those in suburbs such as Brummeria, Lydiana, Silverton, Meyerspark, Nellmapius and Willow Manor. Added incentives are municipal rates that are at least R1000 less in these areas and easy access to the N4 highway, the Eastern Bypass and the city centre.
At the same time, interest in entry-level properties in these suburbs is also high. Van der Merwe says young married couples, people who scale down and buyers who buy in partnerships are turning to sectional title units in the R350 000 to R650 000 price range.
Sellers in this range are accepting offers as much as 10% below asking price because buyers find it more difficult to obtain finance and to put down the higher deposits required by banks.
Activity in the middle segment where properties are priced between R800 000 and R1,5m has slowed considerably. Buyers who would traditionally have bought property in this price range are lowering their sights and are buying down or are opting to rent accommodation. Sellers under pressure to sell are accepting offers as much as 20% below the realistic market price, he says.
Van der Merwe, an engineer who holds an MBA and doctorate in strategic planning and project management, opened the mini-franchise in mid-2008. He says the current dip in selling prices should also be seen in the context of artificially inflated prices during the past boom.
The practice of loading, where false deposits - and thus false selling prices - were recorded, was not only unethical, but also skewed stats on prices achieved. Fortunately, tougher economic conditions seem to have forced adherents of this practice out of the market.
Article by: www.realnet.co.za