A moratorium on new residential development in Polokwane is putting pressure on the local property market and prices are rising as developers wait for the go-ahead on several projects.
In Polokwane, developers who had to put their plans on ice are champing at the bit, ready to start building as soon as the council gives the go-ahead.Maryna van der Merwe, owner of the local RealNet franchise, says the moratorium was put in place to give the city time to upgrade the sewerage system and other infrastructure to serve new residential developments in the burgeoning Limpopo capital.
"And it was expected to be lifted earlier this year, but we are still awaiting an announcement, and developers who had to put their plans on ice are champing at the bit, ready to start building as soon as the council gives the go-ahead," she says.
These new units will then relieve upward pressure on prices and hopefully improve affordability, she says. According to her, prices are too steep at the moment for many prospective buyers, who are having to scale down their housing expectations in line with the financing they can obtain or even give up the idea of buying for now.
Brand new townhouses in Eagles Crest Security Estate, a stone's throw away from The Mall of The North and only 6km east of the Polokwane Central Business District, are available from R1 340 000 - click here to view.In some instances, she says, prospective buyers qualify for less than 30% of the purchase price of property they would wish to buy and have to drastically change their plans. And as a consequence, property in the higher price ranges is starting to languish in the market. Sellers are slow to adjust asking prices in line with current market realities, often waiting more than a year to do so in order to finally attract offers, she says.
Van der Merwe says price resistance is also becoming more evident in the lower price ranges. A recent example, she says, was a unit priced at R600 000, that eventually sold at R500 000, after months on the market.
"Sellers are advised to take the advice of knowledgeable real estate professionals to heart if they want to achieve sales in a reasonable timeframe. And sole mandates are only beneficial if the asking price is realistic - otherwise sellers may end up effectively withholding their property from the market for the duration of the mandate," she cautions.
Prices of apartments and townhouses in Polokwane now range between R500 000 at entry level, and R1.8 million for luxury units, while prices of standard family homes with three bedrooms and one or two bathrooms now average R850 000. Homes with upgrades such as swimming pools or boreholes now sell at an average of R1.2 million.
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