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Good investments under R1 million
Business Day
26 January 2007
WITH house prices having reached an all-time high, buyers — especially first timers — are battling to purchase in decent areas for less than R1m. However, there do seem to be several “gem” suburbs that still offer great value for money.
CAPE TOWN
Muizenburg
Barak Geffen, executive director of Sotheby’s International Realty, says: “Seaside property in certain segments in Western Cape, are fetching prices of up to R65000/m², but there are several suburbs where there is still relative value to be found — Lakeside and Muizenburg are two such suburbs.
“At the Fisherman’s Village security development at Sunrise Circle, Muizenberg, brand new, three bedroom, two bathroom homes start at R895000. Huge money is being poured into the Muizenburg area by developers who are knocking down or redoing derelict buildings and last year Muizenburg Beach was bestowed with Blue Flag status by Cape Town’s city council for its superior amenities, cleanliness and environmental and safety standards. In years to come property in this area can only escalate in value due to its seaside location.”
Lakeside
“One would also do well to invest in inland suburbs adjacent to Muizenburg as there is likely to be a spillover in value a few years down the line. In Lakeside an entry-level three bedroom, two bathroom home with a small garden will cost between R900000 and R1,1m, but will be in need of renovation and may not have garage facilities or added luxuries, such as a swimming pool.
“Bear in mind that Lakeside is a five-minute drive from False Bay beaches and also within easy access of the motorways going into Cape Town’s CBD. In the upper end of this market homes sell at up to R3,5m, which illustrates the potential for future growth.”
GAUTENG
Hartbeespoort Dam
Geffen says that many are realising the great value and lifestyle benefits of Hartbeespoort Dam where one can buy stands within security estates for upwards of R550000.
“Here we currently have one bedroom units priced from R650000 and two bedroom units starting at R950000 all of which have access to the water and boating facilities.
“On the northern shores, suburbs of Schoemansville, Meerhof, Melodie and Ifafi offer older but larger homes for less than R1m mark.”
Tessa Stevens of Lew Geffen Sotheby’s International Realty Hartbeespoort Dam says: “The area used to be a place where many liked to own weekend homes, and although this remains the case, a new private school, Pecanwood College, has made it possible for many families to relocate … in pursuit of an outdoor lifestyle in which to raise their children.”
West Rand
Johan Killian, who operates the Lew Geffen Sotheby’s International Realty franchise on the West Rand, says the area is becoming popular as investors who work in Joburg’s metropole areas take up flexi time arrangements and install broadband, allowing them to avoid peak hour traffic and enjoy the “countrified” benefits of the West Rand.
“Because the West Rand is a bit further out of Johannesburg’s centre there is great value to be found. With rising bond rates and pressure on affordability, there is a definite trend of home buyers setting their sights at properties of less than R1m.”
Barak Geffen says the demand from emerging middle-class buyers moving into the suburbs is an added sustaining factor for houses at the middle or lower end of the market.
“The combined effect of the above has resulted in sustained price growth of between 18% and 25% (depending on area) in the R500000-R900000 price segments throughout suburbs in the greater Joburg area.”
Killian says that on the West Rand one can still purchase desirable properties in attractive suburbs for less than R1m.
KwaZulu-Natal
Many young professionals are buying in Durban’s Berea where, as the city centre rejuvenates, these investments should grow in value in much the same way as areas such as De Waterkant in Cape Town have done. Fazel Adam of Lew Geffen Sotheby’s International Realty Berea says: “In the Sanzala development in Lower Morningside two bedrooms with sea and golf course views are selling at R750000, and are achieving rentals of R4000 a month.
“And, we have seen returns of R100000 for those who bought a year ago and are now selling in this development.”
Geffen says the leafy suburb of Pinetown is another that has often been ignored by investors, mainly due to its distance from the metropole areas of KwaZulu-Natal, but here one is still able to find older properties on large stands offering great value. “We predict these more suburban suburbs (such as Pinetown and Queensburgh) will gain in popularity with younger buyers seeking space and value which are unattainable closer to town.”
Original article published at www.businessday.co.za.
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