Soweto boasts one of top-selling suburbs

SA's property market is picking up with Parklands in Cape Town leading the pack, writes Simpiwe Piliso

Couple realise quick returns on investment

When Victor and Tsidi Zange bought a three-bedroom house in Protea Glen, Soweto, for a bargain R120 000 they never imagined it would almost triple in value in four years.

Today, the modest property is on the market for R350000 and more than 16 people have expressed interest.

Scores of property buyers are looking for houses in the township suburb, south of Johannesburg.

Research provided by The Knowledge Factory, which compiles the SA Property Transfer Guide, listed Protea Glen among the top 10 suburbs in the country, in terms of recorded sales between December last year and February.

The Western Cape suburb of Parklands leads with 81 sales worth a combined R65.9-million, followed by 79 sales in Bloemfontein's Langenhoven Park, worth a combined R67-million. Protea Glen boasts 67 sales worth R16.7-million.

Centurion's Midstream Estate recorded 64 sales worth R104.7-million, followed by 61 sales in Douglasdale, Sandton, worth R60.9-million. Greenstone Hill in Edenvale, Johannesburg, made 60 sales worth R52.2-million.

The Knowledge Factory's research only reviewed full title and sectional title properties collectively, and excluded sales where the purchase price is less than R100000 or greater than R15-million.

While deeds office data from Lightstone Risk Management put the average price in Protea Glen at R65000 in 2008, the research compiled by The Knowledge Factory now puts the average price at R250395.

Rocky Bukhasa, an estate agent in Protea Glen, said homes in the suburb usually remained on the market for only a few days before being snapped up.

Bukhasa, who works for Pam Golding Properties, only has three homes left on his books for Protea Glen.

They include a three-bedroom, single-bathroom house for R360000, a 300m² house with tiled bathroom and toilet for R355000, and a 65m² open-plan house with three bedrooms for R350000.

"The suburb mostly attracts first-time buyers," said Bukhasa.

"Some of the reasons people buy in Protea Glen is because most houses in this area are new or have recently been renovated.

''The prices are also still affordable, compared to that of other areas in Soweto."

Bukhasa, who sells about five houses a month in the suburb, added that prices in Protea Glen averaged between R250000 and R350000.

"Most of my clients have just started their first job, earning between R5000 and R10000, and are looking for comfortable three-bedroom homes at a price they can afford."

His customers include bank employees and civil servants.

Three years ago, reports by banking groups found that more than 60% of real estate professionals in Soweto believed there were more people looking to buy than there was available stock.

There were reportedly seven potential buyers for every property on the market.

Bukhasa said on average, there were about eight potential buyers for every house he advertised.

In 2007, 2406 properties were sold in Protea Glen at an average price of R128861.

At the time, Cosmo City was recorded as the second-most active suburb after notching up 1744 sales at an average value of R109460.

Soweto's property market is attractive because of the multibillion-rand infrastructure taking shape, making it a desirable place to live, work and invest.

Over the years, major developments which have transformed Soweto into a forceful competitor in the property market, include improved roads, upgraded office space, hotel developments, Maponya Mall, Protea Gardens Mall, and the refurbishment of Orlando Stadium.

People who have sold their homes through Bukhasa have bought bigger houses in Roodepoort, west of Johannesburg.

"I would estimate that about 70% of the people for whom I've sold homes in Protea Glen move and buy in Roodepoort," he said.

ERA SA chief executive Gerhard Kotzé said: "While the market of the moment may be somewhat confusing, the survey (by The Knowledge Factory) highlights areas that deserve attention. Residential property surveys provide valuable pointers to soundly-based buying decisions in a volatile property market.

"Depending on your motivation for selecting an area, these types of surveys are valuable confidence builders that you are making the right decision. For example, if you're looking for a home with strong upside potential because of high demand in the area, you might look at the likes of Protea Glen or Cosmo City," said Kotzé.

Self-employed have tough time borrowing

Self-employed South Africans are struggling to secure home loans.

Statistics released by ooba, a bond originator, this week revealed that self-employed people are finding it difficult to have their home loan applications approved, when compared with their employed counterparts.

The statistics show that 57.9% of self-employed applicants had their bonds declined in the 2009-10 financial year, an increase of 2.4%, compared to 2008-09.

Only 48% of employed South Africans had their applications declined.

"Self-employed South Africans, who, despite the fact that they are largely underpinning the economy in South Africa, are generally considered high risk by the financial institutions," said Laurie Wener, managing director for Pam Golding Property's Western Cape region.

"One can only speculate on the number of mortgage-dependent buyers and sellers who are refraining from entering the market because of the difficulty in obtaining mortgage finance," she said.

However, said Saul Geffen, ooba's chief executive, "when an application is rejected by one bank, it is often approved by another ... more than a third of all the home-loan applications declined by one bank in June 2008 were approved by other banks".

Developers concerned as shoppers disappear

Dozens of shopping centre developers have been forced to close because of poor management or frustrated tenants vacating the premises as a result of a lack of customers.

Patrick Flanagan, a top property developer, who has been involved in the development of several major centres, said scores of developers had failed to conduct proper studies before investing millions of rands into a development.

"Understanding consumer behaviour is critical to the success or failure of a new centre, particularly where it competes with other centres which are accessible to the same target market," he said.

"The key to successful retail property development today, taking into consideration the fact that many areas are already served by retail centres, is to understand one's own shopper target market." Flanagan, who has been behind the development of Riverside Mall in Nelspruit, Lakeside Mall in Benoni, Somerset Mall in Somerset West, and Southgate in Johannesburg, will be among experts discussing the challenges facing the multibillion-rand industry at the 14th annual African Congress of Shopping Centres in Cape Town next week.

Flanagan has also been involved in the development of Northgate in Johannesburg, the Boardwalk in Richards Bay, Quaggasentrum in Pretoria West and Hatfield Plaza in Pretoria.

Issues to be discussed include the shortage of skills in the shopping centre management arena and understanding customer behaviour before investing millions into building a shopping centre.

"There are essentially three types of consumer behaviour: convenience shopping, socialising and comparative shopping."

Local bags R14m Cape Town mansion

A four-bedroom house in Cape Town's Bantry Bay was bought for R14.8-million by a South African.

The new homeowner, who asked not to be named, now shares the same sought-after postal code with Indian billionaire Vijay Mallya, owner of United Breweries and Kingfisher Airlines; Italian multi-millionaire Pietro Ferrero, whose family owns chocolate maker Ferrero Rocher; and South African empowerment millionaire businessman Fred Robertson.

Laurie Wener, managing director for Pam Golding Property's Western Cape region, said the sale of several multi-million-rand apartments and mansions in Cape Town, including this four-bedroom Bantry Bay mansion, which features an elevator and a viewing deck with solar-heated pool, were among the growing signs that the property market is entering a recovery phase.

"We've noted a distinct increase in activity ... market activity has shown a definite pick-up ... with sales concentrated in the lower and middle markets, or properties priced from around R800000 to R4.5-million," she said.

But Wener stressed that buyers remain "extremely price-conscious".

Pam Golding Properties recently concluded the sale of a home in Cape Town's up-market suburb of Constantia for R31-million, another for R27-million. A house in Bantry Bay was sold for R20-million.