Rising Tide: First-Time Buyers fuel South Africa's Township Property Boom

First-time buyers are increasingly drawn to South Africa's traditional township property markets, where affordability remains a key attraction. According to Bradd Bendall, interim CEO of BetterBond, the majority of transactions in these areas revolve around the R750,000 price point. He highlights that less than 14% of BetterBond's registered bonds in townships from January to May this year exceeded R1 million, with only one surpassing R2 million.

Lightstone data corroborates this trend, revealing that over half of properties classified as affordable (up to R750,000) are located in traditional townships. BetterBond's application data echoes this, indicating that 65% of registered bonds in township suburbs over the past six months have been for homes priced up to R750,000. Prominent areas within this price range include Shoshanguve in Pretoria, Protea Glen and Protea North in Soweto, and Ivory Park in Tembisa, all offering substantial value for money.

To qualify for a bond of R750,000, prospective buyers typically require a gross household income of around R27,000, well within BetterBond’s average income of R43,800 for first-time buyers.

Among township suburbs, Protea Glen and Soshanguve have emerged as the most popular destinations, jointly accounting for 86% of all bonds registered with BetterBond recently. Protea Glen, known for its affordability and convenient amenities such as shopping centers, schools, and public transport, has become particularly favored by first-time buyers and young families.

In Protea Glen, a well-sized two-bedroom home can be purchased for around R650,000, while in Soshanguve, a similar property costs approximately R690,000, offering access to essential amenities and proximity to Tshwane University of Technology’s Soshanguve South Campus.

In Gauteng, strong bond activity has also been observed in Ivory Park, Tembisa, Daveyton, and Sebokeng. Notably, all buyers in Sebokeng over the past six months were aged between 30 and 39, underscoring the area's appeal to young families and first-time investors.

Moving to the Western Cape, Mitchell’s Plain stands out with significant market activity, ranging from a bond as low as R150,000 to R900,000. Gugulethu also offers affordable housing opportunities, with recent bonds registered at R200,000 and R500,000, attracting younger residents.

Athlone in the Western Cape has seen impressive price appreciation, with properties now averaging R1.6 million compared to R750,000 a decade ago. The area has recently registered bonds exceeding R2 million, reflecting growing demand for property investments.

Lightstone reports that the average age of township buyers is 38, with a significant portion aged between 30 and 39. Mature buyers, aged 40-49, are also active in Protea Glen, Soshanguve, and Mitchell’s Plain, while younger buyers under 25 are opting for homes in Kagiso, Protea Glen, Soshanguve, and Gugulethu.

Bendall emphasizes that these areas appeal to a diverse range of buyers, contributing to economic growth and investor confidence. As BetterBond's data underscores a robust interest in traditional township properties, particularly among aspirant buyers, the outlook for these markets remains positive, promising continued development and community enhancement.

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