Township property on a roll

22 November, 2006 at 12:07 pm | Posted in Economy | Leave a comment

The township residential property market is showing more vibrancy than that of the formerly white suburbs, according to First National Bank (FNB) Home Loans.

At the same time, the national residential property market seems to be shrugging off the last interest rate rise, with R18.8 billion worth of residential properties being registered at the deeds office last month, the second-highest level on record.

FNB Home Loans chief executive Ed Grondel said yesterday that the previous highest level of residential registrations at the deeds office was R19.8 billion, achieved in November last year.

The township market is performing better than the national metropolitan market in terms of the percentage of properties sold at the asking price, the average time it takes to be sold and the perceptions of estate agents about the market in the next three months.

Supply and demand played an enormous role in the township market, Grondel said. Speaking at the release of the latest FNB property barometer for the third quarter, which is based on the perceptions and expectations of estate agents, he revealed that 64 percent of residential properties in the national metropolitan market were sold for less than the asking price, compared with only 12 percent of township properties in Gauteng, 9 percent in Cape Town and 17 percent in Durban. In addition, 74 percent of Gauteng estate agents and 70 percent of Cape Town agents believed township market activity would increase in the next three months, while only 31 percent of agents in the national metropolitan market and 39 percent in Durban expected an improvement in townships.

Grondel said 70 percent of agents believed more people were looking to buy houses in the townships than the available stock and purchases were “buy-to-live and not to let”. While there was still an aspiration to move to the suburbs, the townships had increased appeal for a number of reasons.

Price and affordability remained important, but charges for rates, lights and water were more expensive in suburban areas than in the townships; the townships provided a friendly environment and purchasers grew up and felt comfortable there; a lot of development was taking place in the townships, such as malls, shopping centres, banks and schools, which made it more like suburban life; and there was great access to public transport in the townships but not from suburban areas.

Grondel said a change in mind-set had also occurred in the township market. Property was previously a place to live but there was now a far greater understanding of the commercial value of property.

(BusRep)

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