Recent sharp escalations in the prices of average homes in Welkom have caused buyers to stop in their tracks as they scout the market for best value.
This three bedroom house in Jim Fouchepark, Welkom has three reception rooms. It is selling for R1.2 million - click here to view.
This is according to Brendon Calldo, co-franchisee of top local agency RealNet Goldfieds, who says Welkom offers excellent value on a rand-per-square-metre basis compared to other cities countrywide, but that price increases of up to 25 percent in the most active sector of the market over the past few months have forced keen buyers to start shopping around.
"Solid family homes with three bedrooms and a single bathroom – the old ‘mine’ houses – were selling for around R300 000 last year. But sellers are now achieving up to R435 000, which has come as a surprise to buyers, although it still represents exceptional value in the SA context. Comparable homes in Pretoria, for instance, would sell at prices between R650 000 and R850 000," he says.
At local price levels, Welkom residents earning between R8 000 and R15 000 per month can still afford to buy their own homes. Around 50 percent of current buyers qualify for 100 percent bonds on properties priced at less than R500 000, which underlines the current indecision even among qualified buyers.
This one bedroom townhouse in Jan Cillierspark, Welkom offers an open plan kitchen and a patio. It is on the market for R489 000 - click here to view.
Calldo says local buyers are now taking much longer to look around and to commit to transactions. In May, for instance, a total of about 12 000 viewings of homes for sale were recorded, but only 220 prospective buyers started negotiations.
At the same time, high demand for rental units and solid returns for landlords have attracted the attention of investors, who mainly target entry-level homes at prices between R280 000 and R380 000.
Most properties in this price range are distressed sales and may need some refurbishment. At these low prices, investors are more than willing to upgrade the properties while escalating rentals ensure excellent yields. Average rentals have increased from between R2 500 and R3 800 a month last year to between R4 000 and R4 500 a month currently.
Meanwhile, he says buyers at the top end of the market are also shopping for value and typically target newer units in suburbs close to established schools, such as Jim Fouche Park. Top properties can now achieve prices of up to R3 million.
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