In the area 2 – Potchefstroom

Commuters who work in central Johannesburg and the Sandton office node are contributing to a stable property market in the university town of Potchefstroom.

Kierre Joubert, owner of the local Aida office, reports that the commuting trend is gaining traction in the local market. “Many buyers prefer the relatively easy 110km commute from Potch to central Johannesburg to sitting for hours in traffic congestion from areas closer to the city.

“And with upgrades planned for the main road between Potch and Johannesburg in the next few years, we expect the trend to escalate,” he says. “It will shorten travelling time and allow more buyers to settle their families in the family-friendly town of Potch, while breadwinners keep their city jobs.”

He adds that the Potch market’s stability may also be ascribed to the perennial demand for student housing. “Although sales are now in a lower register, we have not seen the price declines that became widespread in many markets due to the recession.”

And the market for student accommodation is in the process of reinventing itself, he adds. “The popularity of communes, long a mainstay of the local student market, is in decline, with parents, students and investors showing a preference for sectional title units.

“Whereas landlords can expect to rent out single rooms in a commune at around R1500 per month, two-bedroom sectional title units are achieving rentals of between R3500 and R5000 per month. Apart from the fact that they yield a higher return on investment, modern sectional titles typically require less maintenance.

“New units are in strong demand – for example we have sold 70% of units in the new Walthof development near the campus since February. All bachelor units were sold promptly but some 72sqm two-bedroom apartments are still available at around R900 000 each.”

Prices in the local residential market start at around R700 000 and properties costing up to R900 000 are currently in the highest demand. In addition, the market for homes in the R2m price range is being supported by demand among professional people and businessmen, Joubert says, and the top end of the market, although relatively quiet at the moment, still attracts buyers at prices of up to R7m.

Article by: www.aida.co.za