Bloemfontein residential market has weathered the storm

The suburbs north of Bloemfontein, particularly Dan Pienaar, Langenhoven Park, Westdene and Universitas, have traditionally been the more expensive of the Bloemfontein residential precincts, often with prices as much as 35 percent above those of homes to the south of the city.

However, despite recent price rises of 3 percent to 4 percent a year, homes throughout Bloemfontein are still among the least expensive of all the major cities in the country, says Henry Peter Johnson, the Rawson Property Group’s franchisee for Bloemfontein north.

“In the areas that my franchise serves there are about 20 000 homes, almost all freestanding, and their average price is R1.2 million with the full range being from R500 000 to R1.8m. We are also marketing a farm to the north of Bloemfontein for R3.8m, but this is exceptional. In Bloemfontein south, the average price is R700 000.”

Johnson says the residential property market in Bloemfontein is being stimulated by a steady influx of new arrivals to the city and by ongoing developments, and this franchise is involved with several of these.

Two current developments are Lilyvale, a townhouse complex with about 300 detached and semi-detached homes, and Seven Dams, a retirement village where the entry age is 50. This has freestanding face-brick cottages with about 80 m2 of floor area.

Johnson says demand for homes in Bloemfontein north is strong and there is still a fair amount of stock available – his team has about 35 houses for sale right now.

“The limiting factor, however, is the availability of bonds. Many of the potential buyers are hoping to get 100 percent or even 110 percent bonds, but these are rarely awarded and many simply do not have the 5 percent, 10 percent or even 15 percent deposit, without which the banks will often not even consider a mortgage bond. A fairly high number of applicants have impaired credit records, so only 20 to 30 percent of applicants in this area end up getting bonds, despite the preliminary pre-qualifications assistance,” says Johnson.

“On the positive side, there are clear signs that the market has now weathered the recession and is moving upwards, with further price rises likely. This means that anyone buying now will be acquiring appreciating assets, and those considering buying should get their ducks in a row and act as soon as possible.”

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