Pent-up demand for new homes in Centurion

Transforming rapidly in recent years from farmland to a central business hub that connects Johannesburg and Pretoria, Centurion is a far cry from the country area it once was.

With an ever-expanding area and continual demand for residential property here due to its convenient location between two major cities, Centurion has become one of the best property investment locations in Gauteng. Residential property stock cannot keep up with the pent-up demand for new homes that continually outstrips supply.

It makes sense then that RE/MAX Jowic, which already has a strong market share in the area, plans to increase its presence to the wider eastern Centurion areas. Willie van den Berg, Broker/Owner of RE/MAX Jowic says the office has therefore moved its Lynnwood branch to operate from 24 Alexandra Road in Irene, which is a more convenient location that is easily accessible from the N1 Highway.  The new RE/MAX Jowic office will cover most of the east of Centurion including areas such as Irene, Lyttelton, Kloofsig, Doringkloof, Centurion Golf Estate, Highveld, Irene Farm Village, Cornwill Hill, Pierre van Ryneveld and other smaller estates in the area.  Also included are the east of Pretoria, Waterkloof x2, Elarduspark and Monument Park.

Van den Berg says that considering Centurion is one of the fastest growing areas in Gauteng, the property market is currently very active. “Property prices here,” he says, “are starting to increase due to the fact that good residential stock is scarce.”

He notes that well priced homes in the area sell, on average, within approximately 60 days. “Asking prices are achieved only when the property is priced correctly from the outset, with overpriced properties in these areas taking more than a year to sell.”

Van den Berg also points out that there is pent-up demand for newly built homes in the area as developers mostly stopped any further building projects in 2008 when the recession came.

Property prices start at around R450 000 for an entry level, one-bedroom unit on the second or third floor of an apartment complex. A two-bedroom unit on the second or third floor of an apartment complex would cost approximately R550 000, while a three-bedroom unit would sell at around R600 000. “Free-standing units on the ground floor that have a small garden start at R725 000 for a two-bedroom home and range up to around R900 000 for a three-bedroom, two-bathroom unit with a small garden,” says van den Berg.

Pricing for a small three-bedroom house with two bathrooms that is situated outside of a security complex or area will start at roughly R1,1 million. Larger stands of 2000m2 plus are available in areas like Irene and Centurion Golf Estate, while 1ha stands in the upmarket area of Cornwill Hill start at R3 million.

Van den Berg says that there is a large mix of buyers in the area, ranging from first time buyers looking for units, flats and townhouses, to those looking for luxury properties. “Most of the first-time buyers,” he says, “will require full finance and will try to obtain 100% bonds. Those looking to purchase middle class homes are often people who already own a property, mostly apartments or sectional title units, and want to upgrade to a house or a full title property. Most of these buyers have a deposit because of the sale of the previous property. The upper class buyer in these areas is looking for a home priced at R3 million or more, and most of these buyers pay cash.”

According to van den Berg, Centurion is a good area in which to invest in property due to its access to all the mayor routes, the large range of property types the area offers, catering to a wide selection of buyers, plus the excellent rental income these properties can generate. “I believe the demand will continue to increase for property here, and that prices will increase over the next 12 – 18 months because of the high demand.

Adrian Goslett, CEO of RE/MAX of Southern Africa, says that properties in prime locations that are priced according to market related values generally sell much faster than their overpriced counterparts. “Even in an area where demand is outstripping supply, correct pricing is still essential for a successful sale.”

Van den Berg reports that RE/MAX Jowic already has a strong market share in Centurion and surrounding areas. “We are selling more than 100 properties per month, and according to the deeds office data there are only approximately 350 registrations per month in the area. This indicates that we have close on 25% market share and we are looking to grow this share considerably in the near future.

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