Older buyers invest in Pretoria East
Older buyers with cash to invest are finding good value in older suburbs to the east of Pretoria.
So says Dr Willie van der Merwe of the RealNet Watermeyer office, who reports that retirees and buyers approaching retirement are targeting properties in suburbs such as Silverton and Lydiana.
They are either downscaling or are buying property as part of their retirement portfolio, he says, and they are buying now because they expect the market will turn in the near future, which will probably see prices rising. They have also done their homework and are choosing properties in areas where residents have started their own street patrols and make use of very sophisticated security systems.
Van der Merwe adds that confidence in the area has been boosted by the completion earlier this year of multiple staff residences at the British Embassy in Brummeria, as well as the extensive upgrading of the Watermeyer Park shopping complex currently underway.
Prices are attractive right now and compare with prices last seen two to three years ago. But contrary to many opinions, I dont think that prices have necessarily fallen. It is rather a case of the market correcting the practice of loading loans, which was widespread during the boom.
At the height of the boom, many buyers applied and qualified for bonds that included all related purchase costs, such as transfer and registration fees. When these properties were registered, the bond amount was misrepresented as the purchase price, which was patently not the case.
Equally, there is fierce criticism of banks current stringent valuations of properties. Bank values are often 10 to 20% below asking prices, but this, in my view, contributes to correcting a market distorted by the practice of price loading.
He adds that properties sold on auction also influence the market because lower prices achieved put downward pressure on prices of property sold on the open market. All these factors combine to make property in the area a very attractive proposition for cash buyers, he says.
First-time buyers, on the other hand, have a tougher time even if they qualify for 100% bonds because asking prices are higher than the values banks see.
Older buyers are targeting properties in the price range of less than R1m, while younger buyers are showing interest in townhouses under the R500 000 mark.
Article by: www.realnet.co.za