Inner City property prices poised to rise

Johannesburg inner city rents are being driven up by growing tenant demand, according to the fourth Trafalgar inner city report.

The best bachelor flats are renting for just under 2,000 rand/month and the top three bed units are close to 3,000 and/month.

Strong demand and little new development are causing a squeeze on availability, pushing up prices and making tenants more aware of competition for units. In general, there is a noticeable shortage of three-bed apartments. Two-bed units are in demand for shared accommodation, and one- bed units are most popular with couples or young professionals.

Trafalgar letting staff report that lettings have increased from 100 per month last year to 140 per month on the same portfolio and vacancies are down to 5%.

The company also opened an estate agency to handle sales. The report says: "The first sale was a two-bed apartment in Berea, which achieved an 85,000 rand sales price. That was a significant capital gain for the seller, who had paid just 12,000 rand for the unit 12 months earlier."

The report notes that the city authorities recognizes that a variety of housing and residential needs must be catered to in the inner city and is focussing on mixed-income developments that play a positive role in urban revitalisation, like the Johannesburg Housing Company's (JHC) Brickfields estate in Newtown.

"Given that there is little land for greenfields development, the City is focusing on brownfields projects. Initiatives like the Better Buildings Programme (BBP), which free up distressed buildings for re-development, are key to the plan."

It quotes inner city director Yakoob Magda as saying: "Johannesburg inner city can never be the domain of either the rich or the poor."

But the report warns that the gentrification of Johannesburg's "seedier, high-density neighbourhoods - think Hillbrow or Berea - poses a very real threat to the urban poor. The fact is that gentrification further displaces the urban poor. It's a concern being raised throughout SA's cities".

The City must target ongoing and effective urban management, to include everything from maintenance of the city environment, to infrastructure provision, and by-law enforcement.

Over the past few years, the City has created certain institutional infrastructure aimed at tackling urban management. Examples include a metropolitan police department, which continues to focus on the inner city, and a municipal by-law court to enforce everyday infringements.

Johannesburg's Inner City Task Force (ICTF) made up of officials from health, fire, town planning, and building control has already closed down approximately 150 slum buildings in Johannesburg's inner city. The ICTF has also started to put pressure on property owners to fix and maintain their buildings. This is done by issuing notices, handing out fines, and - ultimately - by taking legal action in extreme cases.

Crucially the task force approach allows small infringements to be picked up quickly.

Article from: www.sundaytimes.co.za