An opportunity exists in the suburb of Mulbarton in Johannesburg for real estate investors who are willing to upgrade an older home. According to Lightstone Property data, House Price Appreciation for Freeholds in Mulbarton is at 6% growth YoY. This beats the national year-on-year house price inflation average of 4.55%.
Fanie Viljoen, Broker/Owner of RE/MAX Superior that operates in the area, attributes this strong house price appreciation to the fact that the area offers good value for money. “The older units in particular offer good value and are more spacious. These are great investor opportunities and are in high demand at the moment,” he explains.
For those who are curious to understand what the area offers, homes can start from anywhere between R600,000-R800,000 for two-bedroom townhouses and flats and can climb to around R3.5 million for a four-bedroom freestanding home. In terms of the drawcards Mulbarton presents, Viljoen cites the proximity to major highways and shopping centres as being attractive amenities for buyers. “Traffic is not congested and the suburbs are free of litter with appealing garden fronts. There are a number of recreational venues for all ages too,” he elaborates.
Despite the growth in house prices, sellers are reminded to price the property correctly, especially if the home is older. “Buyers are willing to spend money to renovate, but only at the right price. Being a more established area, the houses are older and need attention. Homes that have been modernised attract a higher selling price off the bat. If you want to modernise, keep in mind that buyers are after open plan space with the trappings of gadgets to make life easier and they are also environmentally conscious wanting a ‘green’ home,” Viljoen advises.
But, while freeholds are showing solid growth, prices have dropped for sectional titles in the area. “There are a tremendous amount of new affordable developments going up at the moment that have been built very quickly and the price doesn’t justify the value in comparison with the size of a freestanding house. The area has always been mostly freeholds but lately there is a tremendous amount of sectional title units being developed and I don’t think that demand matches supply yet. However, this could present opportunities for investors who could purchase a sectional title before demand meets supply and pushes up the prices,” he explains.
Speaking into the concept of buying before demand drives up prices, Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, advises real estate investors to develop a working relationship with a local real estate professional to keep them up to date with trends as they change. “For real estate investors, it is imperative to time the market right to ensure greater profits. Keeping in touch with a local RE/MAX Agent can help investors get an accurate and up-to-date picture of market trends so that they can capitalise on opportunities as and when they arise,” he concludes.
