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Demand is outstripping supply in residential property resales

On average, 30% of residential properties in Gauteng’s northern suburbs which are listed on the Renprop Residential Resales Division’s books are sold before they are even advertised. 

In March, this new division within the Renprop group sold six properties in just as many days. Debbie Justus, manager of Renprop Residential Resales which is focusing on the Gauteng market, attributes this success mostly to the large database of buyers that her division has on their books.
 
She says that while each suburb has its own trend in terms of property price brackets and lifestyle, on the whole a shortage of stock is fuelling demand. “Affordability is suburb driven, and is largely influenced by the buyers needs. Any property in Gauteng that is priced under R1,8million has been selling fast,” says Justus. “Buyers are looking for value for money. In today’s market they would rather purchase a property that needs a bit of work then invest in an immaculate property that is overpriced.”
 
However, Justus points out that despite efforts of the real estate industry at large to educate sellers on correct pricing, many are still not pricing their properties realistically. “The only reason a property doesn’t sell in today’s market is because it is not priced at fair market value for the particular suburb in which it is situated.”
 
According to Justus, the correct pricing of property is even more crucial since more and more buyers are doing their homework, are very well informed and know exactly what the right price range should be for a particular home in a particular suburb. In fact, she says buyers are getting themselves prequalified through a bond originator for home loan finance these days in order to establish exactly what they can afford to pay.
 
Speaking about buying trends, Justus says that many first time homeowners are now looking to upgrade their home, and make up a large percentage of current buyers. In fact, she says around 60% of buyers within the Renprop Residential Resales Division are looking to upgrade, either in size or status or from a sectional title property to full title cluster home.
 
Justus points to Douglasdale in the northern suburbs of Johannesburg as an example of one of the most sought-after suburbs in Gauteng. Highlighted as a hot investment node, prices in this suburb have grown dramatically over the last four years. According to figures sourced from Lightstone, a property statistics and data provider, the average price of a freehold property in the area has increased from just over R1,6-million in 2010 to R2,064-million in 2014. The data shows that most active price brackets in this suburb are between R800 000 and R1,5-million.
 
“Properties within Douglasdale are in high demand due to the amenities in and around the suburb. In line with demand for secure living, properties in Douglasdale are also mostly situated within secure estates, which adds to the area’s appeal,” says Justus.
 
Homes in Douglasdale spend an average of just four weeks on the market before selling, with a difference of 10% to 15% between asking and selling price. Justus says that buyers in Douglasdale are a mix of professionals and family buyers and says that Renprop Residential Resales is currently experiencing a stock shortage in the area due to the high demand for homes here.
 
Other hot investments nodes around Gauteng include Bryanston – which always has been and always will be a sought-after area according to Justus, Lonehill, Paulshof, Sunninghill, Northriding, Boskruin, Bromhoff, Sundowner, Randpark Ridge as well as The Parks areas, Melrose Arch, Houghton, Riverclub, Duxbury and Morningside – another area experiencing high demand and a shortage of stock.
 
These days the price and location of a property have to be right. “Buyers are no longer suburb loyal like they used to be - they are looking for a property that suits their needs, is well located and which offers the best value for money,” Justus concludes.


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