Johannesburg north suburbs are experiencing a boom in property purchases thanks to buyers in the mining industry from Africa and other countries.
This renovated three bedroom home in Parkview was recently sold by Lew Geffen Sotheby’s International Realty.
Estate agents operating in these plush suburbs report an overwhelming increase in property buyers from China, India and African countries including Ghana, Nigeria and Zambia.
According to Pam Golding Properties (PGP), branch managers Jonathan Davies and Rupert Finnemore, this buying trend results from the general growth in mining and mineral beneficiation occurring in sub-Saharan Africa.
Buyers are said to favour among others, Parkmore and Bryanston suburbs.
“Homes and townhouses in secure complexes have been sold for between R3 million and R30 million,” say agents.
Purchasing has been influenced by factors such as security and ease of access to and from work, shopping, entertainment and other places of interest.
Sandton remains a firm favourite with some buyers who just love the view and lifestyle offered by the Michelangelo Towers located at the popular Nelson Mandela Square. PGP is selling one apartment priced at R4.9 million.
Michelangelo Towers nestled above Nelson Mandela Square. Mining related-buyers are eyeing these apartments sold through Pam Golding Properties for R4.9 million.
Since buyers love the security and access to entertainment and shopping, and Sandton City offers both. The centre, one of Africa’s leading shopping destinations recently announcedits newly refurbished and expansion project, which will have cost R1.77 billion at completion in November this year.
Dr Andrew Golding, chief executive of PGP, says the escalating trend in these property transactions is a key indicator that Johannesburg is rapidly becoming the gateway for entrepreneurial development on the African continent.
“While the property market overall continues to experience challenging times, some markets will always find ways to thrive and Johannesburg, with its increasingly cosmopolitan status, falls into that category,” says Dr Golding.
Unlike the local 26 percent of High Net Worth Individuals (HNWIs) reportedly selling their properties due to financial pressure and renting instead, these high-flyers actually have the cash.
It could be said that these buyers belong to the wealthy groupof high net worth individuals worldwide who place great confidence in property as reported in the Knight Frank Wealth Report 2011.
The report revealed that on average, 35 percent of these individuals’ assets are in property with 19 percent in commercial and 10 percent in residential property.
Furthermore, the report stated that 70 percent of the HNWIs interviewed expressed an appetite for further property investments. A big majority told of their intention to add a second, third or fourth homes to their portfolios and in many cases, in countries other than their own.
Davies and Finnemore say the property environment in Northern Johannesburg continues to present sound opportunities for home buyers and property investors.
They explain that there is a resurgence of demand at the top end of the market and the middle and lower end markets continue to sell as well.
For sellers, the reality is that purchasers tend to commit only when they perceive true value in a market where it is no longer possible to obtain in excess of a 100 percent bond. Historically, this would have covered the acquisition costs of the property.
“Buyers today are most likely to have to put down a 10 to 20 percent deposit and apply for an 80 percent bond, a factor which has a constraining effect on house purchases in many sectors of the market,” says Davies.
View of Melrose Arch with area in the foreground showing construction under way.
Finnemore has this to say: “Overall, the northern suburbs of Johannesburg property market remains resilient and continues to demonstrate sustained activity.
He says Parkview, Parkwood and Parktown North have held their own and remain in high demand as desirable suburbs in which to reside.
Ongoing demand for secure estates in the Fourways Gardens and Kyalami areas is also impacting favourably on the sustainability of house prices in these areas where homes fetch between R2.5million and R8 million.
High end markets, Sandhurst, Hyde Park, Morningside and Dunkeld, and sought after Melrose Arch development have demonstrated more resilience than other sectors of the market. Property prices range from R6 million to R40 million in these areas.
“Investors are buying in new developments, some of which offer lower barriers to entry,” says Davies.
This is more likely in instances where developers have held title to land for some time, waiting for trading conditions and the demand for such homes to improve. In the lower-priced development market up to R1.2 million, sectional title units offer good value for money.
“The Gautrain station nodes and infrastructure has created opportunities for property developers, sellers and buyers alike,” adds Davies.
Lew Geffen Sotheby’s International Realty agents Theodora and David Brickhill describe Parkview as a safe place offering an unstressed lifestyle. Prices in this market range from R1.9 million for an untouched oldie to R5.6 million for a renovated modern home.
The new residential property development along Lower Park Drive overlooking Zoo Lake and on Parkview golf course consists of modern lofts, clusters and estate homes priced from R2.5 million to R6.5 million, Brickhill says. – Denise Mhlanga
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