That's the advice of local real estate veteran Izak Heigers, who manages the Bloemfontein franchise of Realty 1 International Property Group.
Commenting on the best investment buys currently to be had in Bloemfontein, he says Estoire, which is meeting a great need for light industrial-zoned land, is playing an important role in keeping the city's commercial and industrial sectors humming during the economic slump.
He says that just a few years ago, Estoire was a bleak sprawl of uninspiring smallholdings but since being rezoned for light industrial development, stand prices have been rising steadily on the back of strong demand. "There are some excellent buys to be had there, especially when you consider their potential to provide healthy long-term capital growth once developed and rented out."
From a residential investment perspective, Heigers says the middle price market is proving very favourable to cash-rich buyers wanting second and third properties. "In the last two months, about half of the deals done by our office involved buyers with significant reserves of cash behind them. Some are end-users, while others are buying with their eyes on the 2010 FIFA World Cup which will create demand for an estimated 20,000 tourism beds. There are also those who want additional properties as part of their long-standing wealth creation plans."
In short supply in most other parts of the country, cash buyers have a presence in Bloemfontein. According to Heigers many hail from the 30,000 farms that surround the area and which produce over 70% of the country's grain and a significant amount of meat and dairy.
Residential stock is plentiful at the moment, partly as a result of cash-strapped bond holders getting rid of their homes, he continues. "A lot of offloading is taking place because of the economic slump, which is in turn creating demand in the rental sector. Right now, you can get a good solid family house for just under R800k, which is less than ABSA's national average price for that category. So provided buyers have enough cash to cover the deposit and legal fees, they can be pretty confident of having any reasonable counter-offer accepted."
For entry-level buyers, however, the market currently appears deaf to their needs. "Only those with about R200k in their pockets to put down as a deposit and to pay their costs will be able to buy a property today, and even then, it's probably not going to be a house," he says, adding that he's hoping that Realty 1 IPG's recent tie-in with Sanlam will assist these buyers with getting access to home finance.
According to Heigers the cheapest homes available are one-bedroom flats, which depending on area, cost anywhere from R360k upwards. Two- and three-bedroom flats in the better areas come with price tags of R500k or more, while starter houses begin at around R700k.
Finally, though values are holding up well in the upmarket residential sector, Heigers says overpricing is numbing the farms and smallholdings sector as banks consistently fail to find value.
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