|Just a few years ago the purchasing thrust of the emerging market in Pinetown’s surrounding township areas was directed at homes in the traditional suburbs as near as possible to the selling price of their township property, but this has now changed to sellers utilising their equity as a deposit rather than as an outright purchase price to buy property often to the maximum of their bond allowance. |
According to Greg Naidoo of Pinetown-based estate agency Ingwe Estates, the trend follows growing realisation among formerly disenfranchised buyers of the wealth creation of bricks and mortar, helped along by the surge in property prices.
Naidoo, interviewed at this week’s launch of his new development San Marcello in Pinetown, said an understanding was under way among African buyers of the promise of prosperity from property as a result of seeing homes purchased for R300 000 a few years ago now being selling at R800 000. The sheer tangibility of the growth was also fuelling inter-suburb upgrading and fast tracking a rising base of property knowledgeable African buy-to-let investors.
He dismisses speculation of any cooling in the volume of African buyers cross pollination into the Pinetown’s suburbs, pointing out that numbers were being suppressed by affordability and a shortage of new building land. A newly built single dwelling home by sister company Ingwe Developments had drawn more than 100 responses when advertised at R480 000.
Upgrading to the more formal suburbs was also being underpinned by strong demand in townships, also spurred along by a substantial increase in the value of township homes in the past few years with a rise in value of more than 200 percent. A recent survey among its 2 000 client base by Ingwe Estate Agents established a “no ceiling” response from African respondents on their preparedness to pay for ownership of a house or a motor car. Naidoo says their earlier reluctance of exposure to financial risk in the purchase of a home had also greatly dissipated.
Reasons for movement from townships to traditional suburbs were access to better schooling and closer proximity to work.
The African investor trend is also confirmed by James Ndlazi principal of Pinetown’s Estates, in both traditional suburbs and so-called townships and “growing by the day”. His rental portfolio has grown by 450 percent so far this year over the same period last year and would be higher but for lack of suitable stock.
Typical target markets are houses in the R550 000 to R650 000 price range and apartments between R300 000 and R500 000. Investor activity has also increased substantially in the townships, with some investors now owning up to four properties, stimulated by pricing of these homes reaching parity or near parity to homes in the suburbs. Rentals of between R2 200 to R3 800 in Umlazi and KwaMashu are being achieved with no shortage of potential tenants viewing the process as an interim measure towards building their funding resources for eventual ownership.
Ndlazi also notes that while township migration into Pinetown was mainly driven by civil servants the impetus now includes more private sector buyers, particularly self-made successful African businessmen.
Turning to San Marcello, Naidoo said the 10 unit duplex development at 8 Marianhill Road, on the site of the old Tick-Tock Creche is intended to meet demand in Pinetown’s close to CBD affordability price range. The 155 sqm metre double-storey townhouses are selling for R895 000. All units have double garaging and two parking bays, main-en-suite and own high walled garden with pets being allowed. Features include granite tops, blackwood kitchen cupboards and emphasis on privacy.
With the first five units nearing completion and a showhouse fitted out, Naidoo says the entire project will be completed and ready for occupation in five months.
Caption: On show this weekend, San Marcello in Pinetown with developer Greg Naidoo in the foreground.