RE/MAX Suburb Trend Report – Potchefstroom Central

Area history

Located in the North West Province on the banks of Mooi River is the academic city of Potchefstroom. While there is some debate regarding the origin of the city’s name, the widely recognised source is that it was named after Andries Hendrik Potgieter, the Voortrekker leader and town founder.

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Founded in 1838 by the Voortrekkers, the city is the second oldest settlement of people of European descent in the former Transvaal, the oldest being Klerksdorp. Potchefstroom was the first to develop into a functional town and served as the first capital of the South African Republic in 1848. This was changed in May 1860, when Potchefstroom became the chief city of the Republic, with the capital moving to Pretoria.

In 1909, during the opening of the City Hall, General Jan Smuts was asked if Potchefstroom would become the capital of the Union. He said that while it would not become the capital, it should aim at becoming the country’s largest educational hub. This led to the city having a much stronger educational inclination.

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Today the city is host to five tertiary institutions and 30 schools, as well as numerous research bureaus and training centres, which has given rise to it being referred to as the ‘city of expertise’.

Area property information

Adrian Goslett, CEO of RE/MAX of Southern Africa, says that between 2004 and 2008 over 400 properties were sold in Potchefstroom central each year, which is very high when compared with a number of other areas throughout the country. However, he notes that the number of sales transactions dropped to around half that in 2009. While the sales volume has improved with the property market’s recovery over the last few years, they are still not at the levels they were during the boom.

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Goslett says that according to Lightstone data, property in Potchefstroom central consists of 72.23% freestanding homes, 26.53% sectional title units and 1.24% estates. The area has performed particularly well with younger generation buyers as the largest group of recent buyers are aged between 18 and 35 years old (42.34%), while around 33.06% are aged between 36 and 49 years old. The latter demographic also account for the highest percentage of recent sellers (32.81%).

According to Goslett from 2004 to 2007 property prices in the area saw a gradual but steady increase, however in 2008 the average price of a sectional title unit saw a dramatic drop, recovering in 2009. While the average price of a freestanding home didn’t drop, it didn’t see any growth during this period either. Since 2010 the price of a freestanding home has once again begun to see growth reaching a high of around R940 000 this year. While the average price of a freestanding home increased, the average price of sectional title units stayed around its 2009 level of around R425 000.

Property price trends

Demand for property

According to Goslett, nearly 49.1% of homes sold in Potchefstroom central between September 2012 and August 2013 were those priced between R400 000 and R800 000.  Around 25.7% were priced between R800 000 and R1.5 million and properties that fell below R400 000 represented 24.2% of the area’s sales. He notes that properties that were sold during this period for between R1.5 million and R3 million represented only 0.7% of the market, while those above R3 million represented just 0.4%.

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