Demand for apartment living in Northern Johannesburg set to continue

The off-plan residential property market will continue to experience strong demand. This is according to Chris Renecle, MD of Renprop, who notes that there is still plenty of life left in the off-plan property cycle. “In the buy-to-let investment market, we are only about one year into a new cycle that typically lasts between four to seven years,” he says.

“Many of the off-plan investment properties that Renprop Residential Projects division has sold this year have been at the higher end of the price spectrum. Higher end investment properties are usually the frontrunner in the cycle,” says Renecle. “Therefore we expect sales for units that are priced in the medium and lower end to follow suit over the next 12 – 24 months.”

Renecle notes that during 2014, Renprop had much success in selling apartments priced in the R1million – R1.6million price range. Renprop has launched six developments during 2014 and have sold majority of the units in these developments – a clear indication of the strong demand for off-plan apartments.

Renprop’s best-selling development this year, The Vantage, was launched in January and met with an overwhelming response from buyers and investors, resulting in 118 of the 165 apartments sold at the launch function. To be situated on the corner of Bath and Tyrwhitt Avenues in the heart of Rosebank, the 10-storey development will house a variety of apartment configurations from one-bedroom, one-bathroom units to three-bedroom, two-bathroom apartments that also include a study and luxury penthouses with a floor space in excess of 150m2. Apartments at The Vantage will include upmarket finishes and will range in size from approximately 50m2 to 200m2.

The Hub on Bryanston Drive, a mixed-use precinct which will be home to Bryanston’s first four-story residential apartment building, is Renprop’s answer to the spike in demand for both commercial and residential space in this region. Designed with upmarket finishes, the 120 units in the residential apartment block at The Hub on Bryanston Drive will range in size from approximately 50m² to 180m².

With demand outstripping supply in Bryanston for residential homes, Renprop also launched a secure new townhouse development with just 54 sectional title units available. Situated on Cowley Road, the development - which is aptly named Habitat on Cowley - offers an ideal investment that is well located close to various business nodes and a range of amenities including good schools and popular shopping centres.
Rivonia is another area experiencing strong demand for residential apartments. “Rivonia is set to become northern Johannesburg’s new high density node, as the western side of this suburb has been earmarked for high density development, according to the area’s Regional Spatial Development Framework,” says Renecle.
It is for this reason that Renprop launched The Coutryards, which will house 178 sectional title apartments in a four-storey apartment building. Measuring between 40m2 and 90m2, the apartments at The Courtyards have been designed in a modern, contemporary style and are available in various configurations. Planned with young professionals in mind and including upmarket finishes, apartments at The Courtyards are well positioned on the corners of 7th and Rivonia Roads, within walking distance to shops, gyms and the Gautrain bus route.

On the back of the sell-out success of Phases 1 and 2 of Douglasgate, a sectional title development in Douglasdale, Renprop launched Phase 4 earlier this year. At the time of launch, just 60 units were still available between Phase 3 and Phase 4. Douglasgate will comprise 232 units in total over approximately 25 blocks of three stories each.

The latest release from Renprop is 101 On The Park, situated along Sandtons’ ‘Golden Mile’ on Katherine Street. Located within walking distance to the Gautrain station as well as to all the major corporate headquarters, 101 On The Park will consist of 240 apartments spread over two towers of 15 stories each. There is a selection of one- and two-bedroom units available starting from R1.5million. A few exclusive, luxury penthouses that boast impressive views will also be available.

101 On The Park was launched to cater to the rental demand for residential units in Sandton, which Renecle believes is likely to outstrip supply. “With close on 15 000 additional people expected to be working in the Sandton area over the next five years, more and more executives will be looking to take up residence within the precinct. It stands to reason that rental demand will increase substantially with this influx of executives. I anticipate that there will be a shortage of rental accommodation in the Sandton CBD in excess of 5 000 units in the next five years,” he says.

Renecle expects demand for apartments to continue well into 2015, especially in the northern suburbs of Johannesburg. “Renprop anticipates launching around five new developments in the northern Johannesburg region between Rosebank and Sunninghill during 2015, which will equate to approximately 800 units,” he says.

Based on the success of The Vantage and continued investor demand in that region, one of the five new developments Renprop will bring to market in the year ahead will be situated in Rosebank. Renecle anticipates the new Rosebank development to launch early next year.

Renecle has found that many investment buyers are purchasing off-plan apartments with cash due to the lack of 100% bonds available for investors. “Rental demand is what is driving sales at the moment. The market is reflecting that demand for investment property is strong with many investors favouring property investment over the local stock market, which is overheated,” says Renecle. “For investors, the earlier in the cycle that they get into this market, the better the returns they can expect to achieve,” he concludes.

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