A prime location, close to amenities and the Soweto Towers, which usually attracts tourists, influenced a 60-year-old man to buy a property at a communal estate in Orlando, Soweto.
This is one of the areas making Soweto an attractive investment destination for property developers.
The man, who owns a home in Braamfischerville, a few kilometres from Roodepoort, bought the property for his 22-year-old daughter earlier this year and plans to rent it out for now.
“I saw the property being built in a perfect place where there is growth, and I liked the location. There is a strong growth in Orlando, there is high demand, and it's a perfect space,” said the new buyer, who did not want to be named.
He said he saw an opportunity to invest in a property that would one day be inherited by his daughter. He said the location was very convenient and close to public transport.
“The location is very close to Bara shopping centre, and then there is Chris Hani Baragwanath Hospital with a big taxi rank. You have the two towers which attract the tourists, and there is the University of Johannesburg and Maponya Mall,” he said.
Tim Akinnusi, CEO of MortgageMarket, a fintech marketplace for home loans, said many residents of Soweto have been renting a back room or single rooms, as there has not been a lot of new property development.
“They [residents] are now very eager to move into their own units that are coming up through all of the lifestyle estates around Soweto,” he said.
MortgageMarket has established that the recent boom in lifestyle developments across Soweto has seen women aged between 28 and 40 emerge as leading buyers.
These new estates — typically featuring one- to three-bedroom apartments — offer amenities usually associated with the northern suburbs, including contemporary finishes, hi-tech security, clubhouses, braai areas, fibre connectivity, artificial soccer pitches and children’s play zones.
There is not a lot of supply. If you can afford to buy property and take on good debt, which is your home loan to purchase a property, it is best to get it now while it is still affordable. Each year it gets more expensive
— Tim Akinnusi, CEO of MortgageMarket
Many units also feature gas geysers and stoves, offering relief from load-shedding disruptions.
Akinnusi said buyers are finding reasons to stay in Soweto rather than moving out of the area because they can't find decent lifestyle apartments to purchase.
“Soweto is not going anywhere; it needs to be developed. There are only so many back-room expansions that can be done.
“People need decent housing that they can call their own, with good security, where they can raise children, where there are facilities for children to play and to socialise inside the estate,” he said.
He added these factors were driving the growth in property interest in Soweto. He said home buyers recognised that Soweto has its own economy with people who are tied to the area because of the sense of “generational legacy” that it has.
He said aspiring homeowners need homes that are saleable and assets that can be registered at the deeds office.
“Soweto doesn't have that a lot at the moment because you can't register a back room at the deeds office. You need to have a fixed property that is linked to the municipality in terms of rate and taxes, and formal administration that goes along with owning property.”
He added that the investment that was coming in the form of student accommodation with the university, hospitals and government departments was bringing long-term value for the area.
These features give property investment intrinsic value. He said most people who are renting are paying almost the same price as what they would if they were buying.
“Once they understand [that] and get pre-approved, and understand what their credit and affordability are, they are more likely to say: 'Why am I renting when I can own this place that I'm currently renting?' That's what triggers them,” he said.
He added that buyers were predominantly women, nurses, government employees and young couples who combined their income for a joint application.
He said a further advantage was that these places accommodate younger children who parents leave behind when they go to work.
Parents find it easier to do that in a lifestyle estate that has security, preschool and recreation facilities.
Akinnusi said the price of property is getting more expensive with increased demand and inflation.
“There is not a lot of supply. If you can afford to buy property and take on good debt, which is your home loan to purchase a property, it is best to get it now while it is still affordable. Each year it gets more expensive.”
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