Estate agents operating in Soweto say that there has been an upswing in sales in the township with more and more people looking to buy bargain properties at affordable prices.
John Loos, property strategist for First National Bank says that houses in the R300k price range were selling rapidly and this is borne out by the 21,7% increase in affordable housing sold in 2010 compared with 2009.
“Many people who bought properties in the northern suburbs of Johannesburg are now downscaling and returning to Soweto where property prices are lower,” he says.
Loos says that Soweto is out-performing other parts of South Africa as the demand for homes in the township remains high.
Bobo Kuzwayo, an estate agent with the Firzt group says that there has been a “lot of movement” in the past two months, more so than in 2010, which was not a good year for property in the township.
However, he warns that banks are making it difficult for homebuyers saying that only five percent of people who express interest in buying a home actually qualify for a bond in terms of the current strict lending criteria.
He says the biggest stumbling block for people wanting to buy properties in the township is the 10% deposit required by banks. “On a property costing say R400k, it means the buyers must have at least R40k in cash and this is often prohibitive for them,” he says.
Apparently properties in the R350k to R650k bracket are attracting the most attention from buyers in Soweto.
“For first-time buyers, there are properties available for as little as R115k and provided that the buyer earns a salary of R3,5k a month they will qualify for one of these homes,” says Kuzwayo.
He is currently operating in the Diepkloof Extension, Pimville and Mofolo North parts of Soweto and says that prospects appear relatively rosy for the first six months of this year but concedes that he would sell more properties if the banks were not imposing such strict lending criteria.
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