Gautrain homes volatile

Growth in property prices within two kilometres of Gautrain stations in Johannesburg and Tshwane remains volatile, consulting firm Lightstone said on Tuesday.

Properties within three kilometres of those stations show a more stable and robust growth, it said in a statement.

"The proportion of Gautrain-related property transactions has fallen significantly between 2008 and 2010 by about 35 percent for 2km properties, 15 percent for 3km properties and 18 percent overall, to about 5.5 percent overall," property analyst Hayley Ivins said.

"It is possible that there has been a wait-and-see attitude on the part of buyers and investors.

"Now that the train is up-and-running, and the retail development has been completed in Rosebank, we're seeing a spike in prices around Rosebank in particular, mostly in the sectional title market."

On the whole, properties within 2km and 3km of Gautrain stations in Rosebank, Sandton and the Pretoria CBD were showing the same pattern of recovery as overall house price inflation in Johannesburg, Tshwane and Gauteng.

Lightstone said house price inflation around the stations had been following general property trends for the past two years, with a short-lived boom between 2005 and mid-2007.

The firm had compiled two studies - the first was looking at data from 2000 to 2007, while the latest study updates this to include sales to date in 2010.

The 2km and 3km distances were chosen to capture the effect of investors looking to benefit from easy access to the stations.

House price inflation in Gauteng declined from around seven percent in 2007 to 0.5 percent during 2008 and to a low of -0.3 percent in 2009.

"Price inflation around the Gautrain stations in Rosebank and Sandton has followed the same trend, to perform at roughly the same rate as overall inflation at between seven percent and 12 percent in 2010," it said.

"This is in contrast to 2007, when overall inflation for Gauteng was at seven percent compared to 15 percent for Rosebank stations and 20 percent for Sandton."

Lightstone said the price of 2km and 3km properties equalised at a median price of around R900 000 in mid-2008, but the 3km had now overtaken the 2km significantly at a median price of around R1.4-million compared with R1.2-million.

Properties within 3km of the Rosebank station were showing the most "obvious" growth.

Almost the reverse trend can be seen in Tshwane, where median prices for the city as a whole are in line with those for Johannesburg and far higher than those for Gautrain properties.

Gautrain properties are priced at about 50 percent below those in Johannesburg at between R480 000 for 2km and R550 000 for 3km, with the 2km prices "levelling off and the 3km prices showing an upward trend".

Lightstone found that there was a similar upward trend in house price inflation in Gauteng and Johannesburg overall compared to areas near stations.

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