Student accommodation a key driver in Bloemfontein’s residential property market

A university city, Bloemfontein’s residential property market enjoys the spin-offs of its well-established educational infrastructure by way of accommodation for students, employees, associated services, and the investment by parents, says Pam Golding Properties area principal, Ulrich Sirgel.

The University of the Free State has a total of 41 169 students, 29 560 of whom are on the Bloemfontein campus and 3 800 on South campus – also in Bloemfontein, plus 2 599 permanent staff members, while the Central University of Technology has more than 21 000 students split across its Bloemfontein and Welkom campuses.

A google search reveals some 20 colleges including Qualitas Career Academy, Rosebank College Bloemfontein Campus, Free State CET College, Boston City Campus, Pearson Institute of Higher Education, Jeppe College, MSC Business College and Intec College.

Says Sirgel: “Activity in Bloemfontein’s residential property market has risen steadily in recent years, with the universities, colleges and good schools making a significant contribution to demand. As a result, we conclude significant sales transactions in areas such as Universitas – an area buzzing with students, Willows, Brandwag, Westdene and central Bloemfontein as well as Langenhoven Park, which is adjacent to Universitas.

“The largest schools like Oranje, Eunice High School, St Michael’s, Greys and St Andrews make a meaningful contribution to those moving into the city, especially from the smaller towns and farms, with some purchasing property for weekend accommodation when they visit their children.

“We also have numerous clients who purchase second and third properties for student accommodation, many of whom convert houses, especially in Universitas. Savvy investors, including budding entrepreneurs, are acquiring one and two-bedroom units to renovate and fully equip the rooms with WiFi, to rent out to a new generation of up-and-coming young professionals who have completed university, or to students.

“Investors seeking this kind of accommodation are buying across a broad range, looking to spend from R300 000 to R1 million for a one or two-bedroom apartment or townhouse, or from R1.7 million to R3 million for a house, and generally seeking a return on investment of at least 10% or more – which sometimes can yield even up to 20%.

“Currently we are marketing elegant two and three-bedroom, freestanding houses in phase two in a new development in Langenhoven Park called La Vida Pico, where 162-230sqm homes on 243-456sqm erven are selling from R2.31 million. Each home includes a private outdoor patio with braai and garden and motorised double garage.”

Sirgel says against the backdrop of marked increase in activity in recent years, including the lockdowns, home ownership remains accessible for first time buyers and repeat purchasers upgrading to larger properties.

“In the areas of Woodlands and Wild Olive, vacant plots of approximately 1 000sqm are ideal for young families, being priced between R980 000 and R1.6 million and with good security, enabling children to cycle, play in the parks and for jogging.”

According to Pam Golding Properties Research Department, while almost two thirds (65.5%) of current market stock in Bloemfontein comprises freehold properties, significantly more sectional title homes are selling each year, rising to 58% of total sales (which includes freehold, sectional title and vacant plots) for 2022 to date. (Source: Lightstone).

The age profile of buyers has also shifted steadily over the past five years, and while both the retiree and mature market is declining, the middle-aged and particularly the young adult market is increasing. With a median sales price of under R1 million for sectional title homes, this market is especially appealing to first-time buyers.

Source: Lightstone

Says Sirgel: “With a median price of R890 000 for a sectional title property for 2022 to date, Bloemfontein is an affordable option for first-time home buyers, particularly as there is no transfer duty on a property sold for under R1 million. According to ooba, the national average purchase price paid by first-time home buyers from January to September 2022 was R1.123 million – highlighting the relative affordability of apartments located in Bloemfontein. The median price of a freehold home purchased in Bloemfontein for the same period is R1.35 million, according to Lightstone.”

Source: Lightstone

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