Centurion definitely not 'bargain city'
News > news - 28 Sep 2006

Bargain hunting is in full swing in the Centurion property market, but with

few exceptions, buyers looking for a low cost "score" in this area are in

for a disappointment.

So says Joey Maritz, principal of leading local agency Homenet VWB, who

notes that while prices in Centurion are generally moving "sideways" at the

moment, investors are not to any large extent selling off the thousands of

buy-to-let flats and townhouses they bought in this area during the recent

boom years.

"This suggests two things; the first being that most of these property

owners are absorbing the recent interest rate increases and presumably

making allowances for anticipated further increases, and the second being

that they have come to terms with the fact that property is no longer

running red hot and has resumed its rightful place in the investment mix as

a medium to longer-term prospect."

Maritz says there has been a noticeable increase lately in tenants wishing

to rent with an option to buy units at current prices.

"This obviously reflects their belief or hope that salaries will catch up

with prices and these homes become more affordable to them over the next 12

to 18 months. Our take however is that playing the waiting game will not

improve their buying power and that bluntly, salaries will not keep up with

house prices.

"And investors would appear to agree in that while they are obviously keen

to let properties they acquired for investment, few are prepared to conclude

these 'option-to-buy' agreements at prices fixed at today's levels.

"In other words, they too anticipate that the market will resume strong

growth in due course and have adjusted their thinking about rental income

and capital growth accordingly."

As for market conditions in general, there is a shortage of entry-level

stock in Centurion, she says. "The upper market segments are moving, albeit

slowly, but most of the action is at the middle to lower end as may be

expected. The entry level in Centurion is currently around R520 000."

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