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Cautious optimism about Pretoria residential property market

The residential property market in Pretoria and Centurion is showing signs of a slow recovery with well-priced properties, especially in golf and security estates, remaining in demand.

Furthermore, the market for top-end, upmarket homes is reflecting gradual growth.

“While we expect the market in the area to remain relatively static for the remainder of the year, some areas are showing some signs of recovery,” says Retha Schutte, regional executive for the Pretoria region of Pam Golding Properties (PGP). “It is too soon to tell whether this is signalling a return to growth in the Pretoria market, but we are optimistic.”

“Good news for the area is that the City of Tshwane Metropolitan Municipality recently announced that it will raise R10 billion over the next five years to fund infrastructure, which is likely to stimulate the local economy and have positive spinoffs for the residential property market. The banks have also relaxed their lending criteria to some degree, which is placing some households in a better position to purchase property.”

Bond originator Ooba furthermore reports that there were several positive indicators for the residential property market in South Africa including year-on-year growth in property prices and an improvement in the numbers of first time homebuyers. Ooba noted that the average national purchase price in July 2012 was R846 863, up 3.1% from R821 579 in July 2011. However, it pointed out that month-on-month purchase price statistics did indicate a slowing in the growth of property prices.

Schutte says that there are areas in Pretoria that are performing strongly, even in the current subdued economic climate. In February (2012), property research organisation Lightstone named Woodhill the top golf estate in terms of value for the year 2011. One of the most upmarket golf estates in Pretoria, the area gained an annual appreciation in property price of 34%. It is worth noting that this increase was for properties in the R2.4 million to R.4 million bracket. Most of the properties overlooked the greens or were situated around the golf course.

“This increase was powered by high demand from buyers seeking properties in this price bracket and affordability was a major driver,” adds Schutte. “The proximity to major routes and amenities, excellent security, the golf, tennis and squash courts, country club and the nearby Woodhill College also stimulated interest in the area.

“Woodhill is not the only golf estate doing well,” adds Schutte. “Security and golf estates throughout the Pretoria region are in high demand, particularly as security remains a factor of prime importance to residents. I anticipate that estate properties such as this will remain sound investments well into the foreseeable future.”

According to Schutte, in recent months PGP has also seen an increase in activity in areas such as Waterkloof Ridge, Waterkloof and Brooklyn. These areas are among the most exclusive residential suburbs in Pretoria and are home to embassy personnel, high profile business executives and sports celebrities. A shortage of stock in certain price bands (i.e. between R2.8 million and R4.5 million) is being experienced within these areas, which PGP views as a positive indicator for the property market.
 
Schutte says that the rental market in Pretoria and Centurion has been performing well. A high demand for rental properties across the Pretoria region has been noted and this is pushing up rental prices across the board. “We are consequently seeing the buy-to-let market slowly but steadily coming back into its own as investors demonstrate their confidence by re-entering the market,” she observes.

“There are challenges being experienced in the residential property market countrywide and this is no different in the Pretoria and Centurion areas. But, just how does this affect the buyer and seller? In my view, approaches to today’s property market need to be practical and level-headed. Both buyers and sellers are advised to seek sound advice that will enable them to make informed decisions around comparative values, the state of the market and future projections.”

There is always much debate around whether sellers should grant property agents sole mandates. In Schutte’s view a sole mandate generally ensures a better marketing plan, a more concerted effort, wider media exposure and a much greater level of commitment from the agent. Competition is healthy, but it needs to be between interested buyers rather than among estate agents, she says.

“Selling a property is a process, and price counselling from an experienced and responsible agent is vital. From the buyer’s perspective it is imperative to explore the market thoroughly, setting aside time to visit properties, while gleaning as much market-related information as possible. A practical approach to buying and selling property is therefore essential,” she concludes.



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