select
|

Strong development trend to continue into 2016

When it comes to launching new residential developments, Chris Renecle, MD of Renprop, reports that the past 12 to 18 months have been the busiest for Renprop in the history of the company. 

During this time, Renprop has successfully brought around 11 new sectional title developments equating to close on 1 700 units to market in the northern Johannesburg suburbs. Renecle expects a healthy level of new residential development to continue well into the New Year.

He notes that the recent developments launched by Renprop have been successful as they were tailored in response to the level of investor demand that the market has shown. Added to this, Renecle also points out that many investors have benefited from marked capital growth during the launch-to-completion cycle of many of these developments, which has added to the investment appeal of off-plan residential apartments this year.

A prime example of this would be The Tyrwhitt in Rosebank. “Investors were attracted by the phenomenal capital growth that units at The Vantage, one of our previous developments in Rosebank, had achieved. Added to this, apartments at The Tyrwhitt were redesigned to accommodate the demand for smaller, better priced units, based on the feedback we had from investors,” says Renecle.

One of the other prominent developments launched by Renprop this year was The Beacon in Illovo. The Beacon is set to be a landmark, 20-storey apartment building that will reshape the Illovo skyline. “Judging by the fact that approximately half of the 240 apartments at The Beacon were sold out at the launch function, it is clear that there is a pent-up demand for these kinds of apartments in the area,” says Renecle.

Aside from the appealing capital growth prospects that these kinds of off-plan apartments present, Renecle believes that the demand for sectional title property in northern Johannesburg has been further fuelled by a strong rental market. “The rental market is expected to continue to show strong demand in the year ahead for a number of reasons, primarily due to a lack of affordability meaning many would-be homeowners will have to continue renting, as well as the continued migratory patterns we are seeing throughout the African continent giving rise to the need for additional rental accommodation.”

While Renecle anticipates that the next 12 months will continue to reflect a similar level of demand from investors for sectional title residential property, he does think that the rate of development may slow down somewhat. “This will be as a direct result of constrained home loan finance,” says Renecle.

He explains that even though there is strong demand for residential property, actual property sales in new developments over the past 18 months have not matched the levels seen during the mid 2000s. “This is due to the fact that the appetite for property purchases has been hampered by investors’ inability to access the required finance.”

Renecle says that the lack of availability of 100% bonds, along with the financial institutions’ general reluctance to grant finance to investors who are looking to expand their property portfolios during 2015, will undoubtedly continue into next year. In fact, he says that the access to finance for investors may possibly even worsen in the near future as the South African economy continues to retract.

That said, Renecle points out that this year there have been a number of cash investors, which gives a clear indication of the level of demand. Renecle anticipates cash investors to dominate the off-plan investment market during 2016.

For those on the lookout for sound sectional title apartment investments to add to their portfolio, Renprop has plans in place to launch a number of residential developments in the year ahead in the prime northern Johannesburg areas of Rosebank, Rivonia, Bryanston, Morningside and Ferndale.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 23 Feb 2018
      RE/MAX Property Associates’ Table View Office, which services property buyers and sellers along the Table Bay coastline and surrounds, has recently sold a home in Woodbridge Island for R11 million – the highest price paid for any home in the sought-after security complex.
    • 23 Feb 2018
      Choosing to invest in an overseas property can be daunting. But as more and more investors recognise the value of a diversified portfolio that includes property outside of their own country of residence, international property investment is growing in popularity.
    • 23 Feb 2018
      The positive change in South Africa’s political landscape is paving the way for an upswing in the local property market.
    • 22 Feb 2018
      An excellent credit score is one of the most priceless assets a potential home buyer can have. This tool has the power to secure favorable mortgage and refinancing rate, influencing everything from the size of the loan repayment to the interest rate on the home loan.
    • 22 Feb 2018
      What do you do if you love your home’s location and the area, but the home no longer fits your growing family’s needs? Do you stay and renovate your existing home or find a home that meets your developing criteria?
    • 22 Feb 2018
      While every owner wants to sell their property at the best possible price, overpricing a home can be the kiss of death for a sale.
    • 21 Feb 2018
      Given the hand they were dealt, government has performed a delicate balancing act which it is hoped will serve to reignite confidence in investment in South Africa, regain our global credibility and satisfy the credit ratings agencies, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
    • 21 Feb 2018
      The real estate mantra, ‘location, location, location’ remains a strong market influence regardless of the prevailing economy, with suburbs like Rondebosch enjoying the buffering benefit of being ideally situated.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK