Consisting of Denneoord and Denneoord Ext 4, Deeds Office data shows that Denneoord has only had eight free hold transactions since February 2005. Nevertheless, the suburb is conveniently situated next to the N17 national highway, leading to and from Benoni, Boksburg South, Germiston and central Johannesburg.
The highest price recorded in the past two years was R1,8m, which is double the two-year average free hold price for the area, and the lowest price recorded in the area was R490k in September 2006. Properties can be snapped up for around R600k, but the area and the homes are in need of repairs and redevelopment.
The question as to whether listed property prices will increase is not a matter of how but when, as growth is already noticeable in many parts of these older East Rand suburbs.
Petra Kotze, sales associate for Re/Max Image Brakpan, says Denneoord consists of older houses, but new development is also taking place. "With the new development property prices should increase," and as a result give the well-established area a more up-to-date and stronger image, Kotze adds.
Alex Fenwick, CEO of Aida National Franchises, says "stock shortages of apartments and sectional title units in medium-income areas are now prompting new entrants to the market to take another look at cheaper homes in less desirable or neglected suburbs - the motivation being that they will probably get a bigger property for their money and will be able to stay longer before they outgrow the space, thereby saving future relocation expenses".
Based on Deeds Office records three transaction amounts were listed in 2005, three in 2006 and two in 2007 so far. Minimum and maximum prices don't give a good reflection of the state of the property market, as prices vary from R600k to R1,8m.
The total property sales figures are more representative, illustrating the year-on-year growth in the market. From 2005 to 2006 total sales increased 21,51%, and 28,93% from 2006 to-date.
The most recent increase in total sales is based on higher-than-average minimum and maximum free hold prices, and it should be noted that this result is off a low transaction base since February 2005.
Consequently Denneoord's free hold market is set for further growth, but keeping in tune with its measured market activity, growth and demand for housing may be offset by the New Credit Act (NCA) and possible rising interest rates toward the end of the year. - James Monteiro
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