The pandemic has had an impact across all sectors of the economy, the township markets included. While the rest of the country saw an increase in activity among buyers, township markets also saw a few new trends emerge.
“Following the initial lockdown, the South African property market experienced a period of unprecedented activity as low-interest rates and pent-up demand drove the number of sales through the roof. This period of hyperactivity lasted longer than expected and is only now seeming to be returning to usual,” says Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett.
RDP homes subject to certain conditions
The effect of the lockdown extended into the township markets as well. Before the lockdown, Mohau Motaung, Broker/Owner of RE/MAX Ebenezer, explains that the majority of RDP homeowners would hold onto their houses because an average RDP home was selling for R150 000. “After lockdown, prices doubled and they are now selling for an average of R320 000 which has created a temptation to sell.”
However, Motaung explains that not all RDP are sellable.
“Some have a condition placed on the title deed that they can only be sold after 10 years after the issue of title deed. Some are not for sale at all because they have a clause that says they will remain family houses and that endorsement seems impossible to waive.”
Motaung has also noticed that since COVID-19, some have chosen to stay with a partner or return to their parents and rent out their own house to generate some money to help the other parties make ends meet.
“There are also these so-called ‘investors’ who put down the offer but never take transfer. Instead, they resell the property to other buyers at a higher price, making themselves huge markups. Lately, we have also seen a lot of cash buyers for high amounts as there has been a number of people who were paid out when they were retrenched due to COVID and for other reasons,” he says.
Rather than there being a shortage of sellers and cash buyers, Motaung points out that those purchasing through home finance are hard to come by in these areas.
'No shortage of sellers'
“Considering the fact that Soweto has approximately 360 000 households and over 590 listed on Property24, not to mention the many private sales that are concluded without being listed on P24, I would not agree that there’s a shortage of sellers. Instead, I would say that banks do not easily approve home loan applications in township markets. In view of the fact that I am also a debt counsellor, I can mention that the banks are extra careful to lend in these areas as they stand to lose the whole investment should it be found that the bond was granted recklessly,” says Motaung.
"The perception that there is a shortage of sellers in township markets stems from the fact that some do tend to hold onto their homes to pass on to the next generation.
“This happens in the so-called ‘traditional’, older four-roomed houses in Soweto, but not within the new developments. Owners of the latter would always opt to sell. Interestingly, I have found that single mothers tend to buy the house for the child that they had earlier in life out of wedlock. Should they later get married, they prefer to keep the house for that child. But, children who are born from the marriage are thought to be okay.”
Soweto has currently *518 new property listings, according to Property24 Trends Data, with the average asking price being R743 850.
The average sale price per erf for 2020 was about R465 000, while Section Scheme Units average sale price for the same period is R450 000.
The latest residential listings on Property24 show that five-plus bedroom homes are most widely available, at an average list price of R1.1 million.
Sellers in the area fall within the 36-49 years (42%), while 34% of buyers are also within 36-49 years, followed by 28% within 50-64 year age group.
Click here to see all the latest trend data for Soweto
In the Cape’s township markets, Lebo Masilo of RE/MAX Impact says that in the more established areas, such as Gugulethu, Nyanga and surrounds, communities tend to keep their homes as they have built them up and modernised them over a few generations.
Generational family homes
“Also, the security structures seem to be more established in the older areas, which makes it less attractive to sell. Many choose to keep these homes as a generational family home, even though the younger generation tends to move to more upmarket areas in the suburbs,” she says.
“In areas like Khayelitsha where crime is on the increase, those who can afford to do so are selling much faster so that they can move to safer, more upmarket areas. Many who have been given the title deeds to their RDP homes are also selling them for bigger houses,” adds Masilo.
Click here to see all the latest trend data for Khayelitsha
Cynthia Ngxanga of RE/MAX Advance operates in Umlazi in KZN, agrees that there is a desire to move away from the townships if one can afford to so do. “There is no shortage of sellers in our township markets because many want to move to the suburbs and now they are selling their houses. When they received their title deeds to their RDP houses, some of them sell and some don’t. Despite this, there are always clients who want to buy in townships because they can’t afford to buy expensive properties elsewhere,” she says.
Soweto has currently *518 new property listings, according to Property24 Trends Data, with the average asking price being R743 850.
The average sale price per erf for 2020 was about R465 000, while Section Scheme Units average sale price for the same period is R450 000.
The latest residential listings on Property24 show that five-plus bedroom homes are most widely available, at an average list price of R1.1 million.
Sellers in the area fall within the 36-49 years (42%), while 34% of buyers are also within 36-49 years, followed by 28% within 50-64 year age group.
Click here to see all the latest trend data for Umlazi
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*Property24 Listings Data Disclaimer: The trends detailed in this article are based on Property24 listings, current at the time of publishing, and property transfer data supplied by Deeds offices, which typically take 3-4 months to reflect. Suburbs are listed according to Property24's geographical database. In some areas this will include both commercial and residential properties. The age demographic data of buyers, sellers and stable owners is determined over a six-month period. These Property Values should not be used as a substitute for independent professional advice and is subject to Property24.com Terms and Conditions.
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