Still value to be had in Gauteng

With average house prices in Greater Johannesburg fast approaching the R1m threshold (as measured by Absa's housing index) it's not surprising that property buyers are battling to find good buys for less than a million. However, real estate agents say there are areas that offer value at this end of the market. The general consensus is that the West and East Rand, the Hartbeespoort Dam and the Johannesburg inner city still offer good buying opportunities for owner-occupiers and investors alike.

Barak Geffen, executive director of Sotheby's International Realty, says Hartbeespoort Dam offers plenty of upside as more and more buyers realize the area's lifestyle benefits as well as its close proximity to Pretoria and Johannesburg.

He says there are currently one bedroom units on the market priced from R650 000 and two bedroom units starting at R950 000, all of which have access to the water and boating facilities. On the northern shores, the suburbs of Schoemansville, Meerhof, Melodie and Ifafi offer older but larger homes for under R1m.

The West Rand offers value as it's a bit further off Johannesburg's beaten track. In Ruimsig for instance, modern three bedroom clusters with two bathrooms in secure complexes are available at around R895 000. In Little Falls two bedroom sectional title units sell for R550 000. Geffen says similar value can also be found in the Helderkuin and Kenmare neighbourhoods.

Patsy Pretorius, who operates four Chas Everitt International offices on the East Rand, says the area is becoming increasingly popular with younger, first-time buyers who cannot afford to live in more centrally located suburbs of Johannesburg. In Nigel for instance, a comfortable three bedroom, two bathroom home will cost around R420 000, in Springs about R480 000 and in Brakpan about R540 000.

The tranquil small town of Vaaloewer, situated on the banks of the Vaal River just 25km from Vanderbijlpark and Parys, is another area now being discovered by value seekers, particularly those wanting to invest in lifestyle properties. Pierre van den Berg, Pam Golding Properties area principal based in Vanderbijlpark, says homes near the entrance of the town are still priced in the region of R390 000 to R890 000.

Dr Piet Botha, chairman of the Nationlink estate agency group, singles out Fourways as an affordable growth area. He says average selling prices are still around R766 000.

Industry commentators say Johannesburg's inner city (including Braamfontein) is starting to lure more and more buy-to-let investors on the back of the ongoing office-to-flat conversion trend. A number of developers offer studio and one bedroom units at prices ranging between roughly R350 000 and R700 000. Rental yields in the inner city are generally around the 10% mark, which is more than what landlords would typically be earning on rental properties in Johannesburg's northern suburbs.
Richard Rubin, MD of inner city developer Aengus Lifestyle Properties, says downtown Jo'burg is set to enter a new growth spurt in 2007 as an increasing number of mothballed office buildings are converted into apartments. Rubin expects inner city living to become a popular option over the next few years as the CBD continues to expand its retail and entertainment offering. - Joan Muller

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