Value for money and low interest rates spur demand for sectional title properties in Midrand suburbs
Sectional title properties, especially those priced below R1 million in various suburbs in Midrand, Gauteng, are seeing huge demand from buy-to-let investors, first-time buyers, young professionals and young families seeking value – a trend further boosted by the historically low interest rates and zero transfer duty in this price bracket, reports Pam Golding Properties.
Demand often exceeds supply in some areas, especially in the below R1 million price bracket, and this is increasing due to the meaningful reduction in interest rates this year, which together with the zero transfer duty in this price band translates into better affordability for prospective buyers, say Pam Golding Properties area specialists, Fushai Runyowa and Reggie Toolo.
“Owners tend to hold onto their apartments for longer before selling, creating stock shortages. When they finally decide to sell, it is generally in order to upgrade to either a larger apartment or a freestanding home,” say the agents.
“Currently, most sales activity takes place within the price range from R500 000 for a bachelor/one-bedroom apartment up to R900 000 for two-bedroom units – with prices mainly influenced by the area and facilities within the complex.”
Data from Lightstone shows that in Erand Gardens, 52% of stable owners are aged between 36-49 years, with 61% of recent buyers falling into the category of young adults (18-35), while in Noordwyk, 60% of stable owners are middle-age (36-49 years) with 47% of recent buyers being young adults. In Vorna Valley 62% of stable owners are aged between 36-49 years, with young adults accounting for 41% of recent buyers.
Sandra Gordon, Pam Golding Properties senior market and research analyst says Lightstone research shows that in these suburbs, sectional title properties dominate the housing stock. Gauteng sectional title unit sales have risen from 53.6% of total home sales in the province in 2010 to 59.1% in 2019. In 2019, properties priced below R800 000 accounted for 51.0% of total sectional title unit sales, while properties priced between R800 000 and R1.5 million accounted for 36.1% of sales.
“There are a couple of factors which undoubtedly contribute to the shift of sectional title sales into higher price bands, including rising house prices (including increased building costs), strong demand from first-time buyers entering the market and the growing lifestyle shift towards downsizing – which is seeing homeowners across all price bands embrace the benefits of a lock-up-and-go and live-work-play lifestyle,” says Gordon.
Accessible property prices
According to Runyowa and Toolo, in Erand Gardens and Noordwyk, prices start from around R420 000 for a bachelor apartment, R500 000 for one-bedroom units, R590 000 for two-bedroom units and from R850 000 – R1.150 million for a three-bathroom apartment. “In the established suburb of Vorna Valley, with its mature trees and attractive neighbourhood, prices start from R680 000 for a two-bedroom apartment and can vary up to R850 000. However, when well-priced properties come onto the market, they are usually snapped up on listing. Since some of the complexes are now old, this gives buyers an opportunity to buy and then renovate the apartment to suit their own taste.”
Lightstone data shows that over five and 10-year periods, sectional title prices in Erand Gardens, Noordwyk and Vorna Valley have consistently shown good growth despite a slow growth in prices nationally.
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“Buy-to-let investors in these areas seek to minimise their expenditure while maximising their returns. Therefore, most of them tend to buy in well-maintained complexes with lifestyle facilities to try and attract the younger generation of tenants seeking this lifestyle.” In addition, the agents say one- and two-bedroom apartments are quite popular with investors.
In Vorna Valley particularly, the agents say there is increased demand for two-bedroom, one-bathroom apartments, which is also where there is most activity. Here, rentals range from about R6 700 per month. There is especially a shortage of stock for two-bedroom garden units as most young families prefer these units to enable children to play in the garden.
Apart from affordable prices in these suburbs, the agents say Midrand is centrally located between Johannesburg and Centurion, with easy access to main roads and highways and the Midrand Gautrain station, while many complexes in Noordwyk are situated along the Gautrain bus route. There are also a number of amenities including entertainment and medical facilities, shopping centres, places of worship and excellent schools in and around these suburbs.
“The fact that Erand Gardens, Noordwyk and Vorna Valley have seen prices grow over the last decade is testament that these suburbs offer good value-for-money, and well-priced homes will continue to sell quickly,” add the agents.
For further information, contact the respective Pam Golding Properties area specialists: Fushai Runyowa (Erand Gardens and Noordwyk) via firstname.lastname@example.org or 061 098 6940; and Reggie Toolo ( Vorna Valley) via email@example.com or 082 565 1857.
Posted by The Know - Pam Golding Properties