Refurbishments creating new pool of quality property

The countrywide boom in property refurbishments is gathering momentum, creating a new pool of highly marketable housing stock.

CEO of ERA South Africa property group Gerhard Kotzé says drivers behind the refurbishment phenomenon are many and varied.

“Essentially however it has to do with affordability of property – or rather the lack thereof, due mostly to the credit crunch - obliging many homeowners to upgrade their existing properties to meet their housing needs rather than buy afresh.

“A major plus is that areas such as Mowbray in the Cape which were somewhat depressed in the past are now enjoying a new lease on property life, in the process raising standards and avoiding the decline that usually characterises older suburbs nearing the end of their life cycle.”

The trend, he says, is being fuelled by the need to curb commuting costs in that many of the areas that lend themselves to this form of revival also happen to be close to major amenities and transport routes.

“It also ties in to some extent with the propensity to ‘semigrate’ and the creation of artists’ colonies such as Parys in the Free State.”

And the benefits are extensive in those areas where character is being preserved, values are rising and above all new stocks of marketable housing properties are being created.

“That’s important in the context of current economic conditions that are creating pent up demand for property,” Kotzé says. “The booming rental market bears this out in that a large proportion of those presently obliged to rent are potential homebuyers.

“That’s normal in the current high interest rate environment. However, coupled with service bottlenecks and bureaucratic red tape that slow town planning approvals and thus housing delivery, it is creating a supply time bomb.

“Hopefully, the refurbishment trend will go at least some way towards mitigating the problem that will become evident when the property cycle turns.”

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