Southern suburbs could get boost from fuel price

There’s a new game in town when it comes to factors influencing the choice of location for homebuyers – fuel price increases that can add substantially to the cost of commuting.

And Johannesburg’s Southern suburbs are seen as being in line to benefit, says Colin Rodrigues, principal of leading local agency Homenet Delta, who notes that his staff have detected a new addition to the list of Frequently Asked Questions (FAQ’s) buyers come up with when seeking a home.

“It’s all to do with the cost of transport as the petrol price threatens to go through the roof, courtesy of the new Government fuel levy announced in the Budget and the increase in the price of oil,” he says.

“Also, the effective reduction in travel allowances for motorists announced in the budget will add to the changing scenario.“

A total petrol price increase of 70c a litre over the next few months has been indicated by Government. That’s a significant jump by any measure and it will impact on every facet of the economy including property. “What’s more, if the value of the rand weakens again, the price impact on petrol and other fuel would be further intensified,” says Rodrigues.

“Location relative to infrastructure and places of employment has always been a factor in home buying, of course. However overlaying that component now is the added dimension of travel costs. Typically factors in the home buying decision making process include the likes of security, schools, places of worship, sports facilities and so on. And of course the other major decider in today’s market is security.

“Now however, petrol prices will become increasingly important in the process and the impact on buying patterns in the South could be significant in that, relatively speaking at least, the South’s road congestion and distances to and from places of work are less than the Northern suburbs.”

Older Southern suburbs homes in more established areas could find themselves in even greater demand than at present. On the other hand, newer homes built in areas where new transport infrastructure is available may win out in the buying debate, he says.

“Areas such as Glen Vista, Bassonia, Mulbarton and Mondeor, for example, are all within relatively easy reach of the Johannesburg CBD, Ormonde and Braamfontein.

“The impact of the transport cost increases could also be felt in terms of business planning as well. Captains of industry and commerce are keen to establish their businesses close to home base for obvious reasons and that could have a spin-off on demand for property in the South. New business centers such as the Crown Mines development are already in the pipeline.

“Also, location of businesses will be increasingly influenced by employees’ travel convenience and in this respect as well, the South stands to benefit from the petrol factor."

Article by: http://www.homenet.co.za