Cape Town still in big demand, however Johannesburg more affordable

Cape Town still rules the roost for property demand as property buyers are flocking to Cape Town’s Atlantic Seaboard and City Bowl area, and they are coming from all over. Six of the highest sales in Cape Town concluded this year were to buyers from Gauteng who paid between R26 million and R66 million for houses on the exclusive Atlantic Seaboard, says Ross Levin, licensee for Seeff Atlantic Seaboard and City Bowl.

The City Bowl and CBD is still the more affordable with about 61% of all sales under R3 million, and only 5% above R10 million. About a handful of high-end, luxury houses have sold above R20 million, mostly in Tamboerskloof (up to R20 million), and Higgovale (up to R32.5 million), and mostly to local buyers, says Levin.

The average price for sectional title property in the City Bowl is around R2.5 million, and slightly lower at R2.3 million in the high density CBD area. The most active price range is R1.5 million to R2.5 million.

Freehold house prices stand at R5.5 million in Vredehoek, R6.5 million in Gardens, R8.8 million in Oranjezicht, R10.5 million in Tamboerskloof, and a significant R17.9 million in Higgovale.

Johannesburg still the most affordable metro

Johannesburg is the most affordable metro in the country whether you want to buy or rent, according to Seeff.

Lightstone data shows that the average transaction price for the metro is around R1.2 million. This is below the national average of R1.3 million. Comparatively, the national average for Pretoria/Tshwane is slightly above this, and stands at R1.4 million for Durban/eThekwini based on data for this year.

Despite modest inflation figures, the demand for property remains strong, especially among first-time buyers and those seeking investment opportunities. Lara-Rachel Spronk, Franchise Sales Manager at Just Property Head Office, looks at the current market

Only 4.82% of transactions are valued at R3 million and over. The average price for first-time buyer homes is around R700,000 to R800,000, while the average price for luxury homes is R4 million according to the data.

There is a massive demand for new developments in Gauteng, here a few developments and suburbs that are popular:

• Olea View (Broadacres)

• Steyn City (Fourways)

• The Terrace (Sandton Gate)

• Randburg Square (Randburg)

• Rosebank (Johannesburg

Neighbouring suburbs such as Honeydew, Wilgeheuwel, Radiokop and Allens Nek offer even better value for buyers, she says. Average family houses in Radiokop and Wilgeheuwel are selling from around R1.5 million, larger townhouses from R1.1 million, and small units from just R600,000.

Spronk says as buying property is probably one of the most important decisions and investments you'll ever make in your lifetime just keep the following in mind:

• Understand the market.  

Look at what the area offers and decide if the amenities are in line with what your needs are likely to be over a period of seven to ten years.  

• Get your financial house in order.  

Ensure that your credit score is looking healthy, put aside a healthy deposit, and understand the full scope of what your monthly commitment will be when buying that property.

• Get pre-approved.

Get your pre-approval so that you know what you qualify for in terms of the bond repayment.  Then, most importantly, do not max out your budget or buy for the full amount that you qualify for. Ensure that you keep an emergency fund available for all things relating to your property.

• Work with professionals.

Ensure that are getting the best advice to guide you on this journey.

Property is still the best way to build a legacy and bolster generational wealth. With that in mind, investors should be looking at the areas where yield is highest: