Keep your cool and focus on the hotspots

CAPE TOWN (November 06) - While the residential property market remains under considerable pressure there is still good opportunity for buyers wishing to capitalise on the current market and who have available funds or high equity, according to Dr Andrew Golding, CE of the Pam Golding Property group.

Commenting on the current status of the market he points out in a company media release that naturally bonded transfers have slowed more rapidly than un-bonded transfers - which have remained fairly consistent since late 2004.

“And while house prices are currently down by between 10 and 15 percent, Gauteng with its strong economy and low proportion of leisure homes has consistently been the least volatile province in terms of house price inflation.

In addition, despite the slowdown in leisure properties, Golding says, KwaZulu-Natal and the Eastern Cape have yielded the greatest capital appreciation since 2000. “Price inflation in the affordable segment, which has performed very well for some time, is now slowing rapidly, and unsurprisingly, affordable housing volumes have held up better than other segments.

"We anticipate that house price inflation will start to bottom out in mid 2009 at negative five percent. Already, as a group, Pam Golding Properties has noticed a marked upturn in sales volumes in September and attribute this to increased market share as consumers turn to respected brands, coupled with focused marketing. PGP also continues to see steady sales to cash buyers and an increase in rental demand."

Property hotspots:

Dr Golding says given the above, “astute buyers are heeding signals that the market is reaching its lowest ebb – prior to turning around - in order to ensure they do not miss out on favourable purchase opportunities, which exist in the various regions.

Focussing on regions, Golding says in the Western Cape there are very good buys at present in the Cape Town central city; on the Atlantic Seaboard – an area which always enjoy sound returns and where one can in fact still acquire a one or two bedroom apartment for under R2 million; and along the West Coast, where there is excellent value for money both in terms of houses and vacant plots - in areas such as Langebaan.

The Boland and Overberg regions, he adds, generally offers very good value for money and are experiencing increased interest from those seeking a secure place to raise a family, with good schools.

“Right now Wellington offers very sound value with good quality family homes available between R1- and R2 million, as well as Robertson on the R62, where a brand new two bedroom home can be acquired for R850 000. Currently the Silwerstrand Golf & River Estate in Robertson offers three bedroom townhouses for around R1.4 million," he says.

In Gauteng, on the East Rand, PGP is seeing exceptional sales of properties under R1 million – offering huge value for money; while another 'hot' area is Krugersdorp, in terms of older homes offer sound potential for investment. In addition, this area still has pockets of land suitable for development. The advice from PGP is to follow the Gautrain – particularly the nodes in the vicinity of the Gautrain stations, where significant infrastructural improvements are taking place.

“Areas such as Rosebank and Killarney still offer sound buying opportunities, while PGP has highlighted an emerging new 'hotspot' in the new South of Johannesburg, expanding its operation in the area to meet the current and expected growth in demand for quality homes in top-end suburbs such as Glenvista, Bassonia and Meyersdal (Alberton).

The 'New South' in the greater Johannesburg homes marke when compared with the Northern Suburbs, like-on-like homes in the 'elite' areas of the South currently cost up to 50 percent less. As building costs continue to rise, widening even further the price gap between new and existing homes, the price differential between North and South will become even more marked.

PGP's recent sales in the South reflect a strong demand for lower entry level homes at around R550 000, while homes at the top end are fetching up to R12 million. The company recently achieved a record price for Bassonia of R6,5 million.

"Virtually anywhere along the Garden Route from Mossel Bay to Plettenberg Bay – this region is a hotspot for those 'semigrating' from the crime and bustle of busy city life for a better quality of life.

“There is still good value in these towns as well as in the Eastern Cape coastal port cities of Port Elizabeth and East London. The Eastern Cape also has excellent schools attended by children from around Southern Africa. Grahamstown, which is home to renowned Rhodes University, St Andrews, Kingswood College and Diocesan School for Girls, is a major drawcard, attracting many parents to invest in property in the town. The Karoo, with its character-filled towns, continues to be high on the priority list for those escaping city life for clean air and a more balanced way of life. Recommended Karoo towns include Graaff-Reinet and Oudtshoorn.

In KwaZulu-Natal, Golding says, the south coast continues to offer extremely sound investment opportunities with properties still very affordable and in very scenic surrounds.

“Astute investors purchasing on the lower part of the south coast in the Margate and surrounding areas will have seen that properties which approximately 15 years ago sold for R250 000 are currently selling for R2.5 million and more. The fact that there's very good value for money in the residential property market makes Pietermaritzburg very appealing for young and first time buyers. Two bedroom flats are still available for under R500 000 while brand new homes in residential developments can be purchased for prices ranging between R500 000 and R800 000," says Golding.

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