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Publication

BUSINESS DAY HOME FRONT

Page

8-9

Date

Fri 19 May 2017

AVE (ZAR)

32193.27

HOUSE PRICES

Gauteng draws

HOMEFRONT

first-time buyersFirst-time buyers will benefit from the increase in the exemption threshold for transfer duty,but is it still possible tofind a decent starter home in a Gauteng metro for less than Rlm?

WORDS: NEESA MOODLEY :: PHOTOS: SUPPLIED

Age of buyer by province

60%

50%

40%

30%

20%

Limpopo

I 18-25

Source: Lightstone

Free State NorthernCape

' 25-35

WesternCape

. 35-45

KwaZulu-Natal Mpumalanga

' 45-55 ' 55-65

Gauteng

| } e5-Older

ox .-- Cie: ake: -North West Eastern

Cape

tatistics fromLightstone showthat over thepast 12 years,50%of young

people who were buyingproperties were doing soin Gauteng as opposedtoelsewhere in the country.A recent survey by the

property analysts foundthat a young person,aged 25-35, was morelikely to earn a salary inGauteng that would allowthem to get started on theproperty ladder. You needto earn at least R30,000a month to qualify fora home loan of Rlm.

In this year's budget,transfer duty relief wasgiven to support low-income households inaffording a home, with

the exemption thresholdincreasing from RT750,000to R900,000.The upshot is that if

you want to buy a decentstarter home and arekeen to take advantageof the change, you willbe looking at propertiespriced at R900,000 orless. But are there still goodvalue homes available atthis price, especially inGauteng, and has the reliefaffected property sales inthis bracket?

SAVINGRupert Finnemore, regionalhead of Pam GoldingProperties in Gauteng,says the 20%increasein the threshold fortransfer duty is likely toplay an important role in

LOWER PRICES,MORE SALES

Properties pricedbetween R400,000 andR800,000 accountedfor 26.76% of sales, whilethose priced betweenR800,000 and R1.5mmade up 23.89% ofthe country's homesalesduring the firstthree months of theyear, it was reported inthe RE/MAXNationalHousing report Q12017.

Homes priced fromR1.5m to Ramrepresented a 14.54%share of the market,while properties witha price tag above theR3m mark accountedfor just 5.21%.

FIRST-TIME BUYERS

About 8.49% of propertytransactions in the firstquarter of the year werefirst-time registrations,with the remaining 91.51%repeat sales, accordingto the RE/MAXNationalHousing Report Q1 2017.

About 72,771peoplebought a home for thefirst time in 2016, whichwas 32,941 fewer buyersthan the previous year- proof that the highercost of living is takingits toll on prospectivehomeowners. Themajority of first-timebuyers were between26 and 40 years old.

However, consumers overthe age of 70 and underthe age of 20 boughtproperty for the firsttime in 2016. Suburbsmost in demand forthis demographic of themarket were in Gautengand the Western Cape,close to the respectiveeconomic hubs ofTshwane, Johannesburgand Cape Town.

Source:RE/MAXNational Housingreport Q1 2017

"It is stillpossible toget a decentstarter homein a majorGautengmetro forunder Rim"Paul-Roux De Kock,analytics director,Lightstone

"Reflectingthis growingfirst-time buyermarket, as wellas a downsizingtrend, in themore affordablehousing marketprices remainresilient"Rupert Finnemore, regional

head, Pam GoldingProperties Gauteng

supporting the lower pricebracket of the residentialproperty market. Jacquesdu Toit, property analystat Absa Home Loans,says the adjustments willbring a saving of R4,500in respect of the amountpayable on all propertiessold from March this year.Jawitz Properties CEOHerschel Jawitz says thatat this level of the market,R4,500 is a meaningfulamount that can be usedtowards other transactioncosts. "Very often first-time buyers qualify froman affordability pointof view but don't haveenough for the transactionfees or deposit to buy aproperty. This will make adifference," he says.

BUYER CHOICEPaul-Roux De Kock,Lightstone's analyticsdirector, says the size ofthe Gauteng market meansbuyers have more choice.He says it is still possible toget a decent starter homein a major Gauteng metrofor under Rlm, which hasresulted in more and moreyoungsters buying in areassuch as Delmore Park inBoksburg, Protea Gardensin Soweto and Durley inBronkhorstspruit.Eveleigh Heights offers

a sectional title apartmentcomplex and gated villagewith security featuresand communal facilities,situated in Boksburg'sEveleigh suburb, nearRavenswood. The 240"move-in ready" unitswith modern finishesrange from 79mto101.4m?and pricing starts

HOMEFRONT

Eveleigh Heights complex in Eveleigh, Boksburg

at R849,000, whichincludes transfer duty.

Says Ricky Goncalvesof developer StonesmanProjects: "EveleighHeights has 15four-storeyapartment blocks of two-or three-bedroom withtwo bathroom units, eachwith either basementparking or a coveredparking bay, as well asvisitors' parking. It wasalready 55%sold out beforethe official marketinglaunch, and we expect therest to move fast."

Mariaan Otto, a salesassociate at RE/MAX inKempton Park, says thatsince the new transferduty threshold kicked in,she has seen a definiteupsurge in enquiriesabout properties pricedat R900,000 and less.In April, RE/MAX had atwo-bedroom townhouseof 150m? available inKempton Park AH &Extension for R694,000, arepayment of R6,929 over20 years.

Seeff Properties had alisting for a R900,000three-bedroom homeon a 202m property inDiepkloof, which wouldcost buyers R8,985 amonth at an interest rate of10.5% over 20 years.

AFFORDABLESays Finnemore:"Reflecting this growingfirst-time buyer market,as well as a downsizingtrend, in the moreaffordable housing marketprices remain resilientand well-situated homesand apartments are indemand." As households

come under increasingfinancial pressure,there has been a moveto downscale to morecompact and affordablehomes, he says.

The FNB Estate AgentSurveys found that first-time buyers made up22% and 24% of salesin Johannesburg andTshwane respectivelyin 2016, but only anestimated 13%of buyersin Cape Town. Finnemoresays this reflects thegreater affordability ofresidential property andeconomic opportunityavailable in Gauteng.

"The demand formore affordable homeshas meant that thereare particularly activelocal housing markets inareas such as Midrand,

* 'e.

Olifantsfontein, Randburg,Silverton in Pretoria andformer townships such asSoweto and Mamelodi, toname just a few."

Despite slow nationaleconomic indicators,Finnemore says, theSoweto residential propertymarket remains one of themost buoyant in Gauteng.

RATES"There are a number ofreasons for this, includingthe fact that property ratesin Soweto are substantiallycheaper than in thesuburbs, and homes inSoweto offer affordability aswell as excellent value formoney," he says.According to Pam

Golding Properties' data,the average property pricein Soweto is R620,000

and there is considerabledemand for homes pricedbetween R350,000 andR700,000.Retha Schutte, regional

head of Pam GoldingProperties in Pretoria, saysthe property market inBronkhorstspruit, 50kmeast of the capital, tends toreflect the trends evidentat the provincial level: theupper end of the marketin the area has slowedsomewhat while moreaffordable homes underRl.5m remain in demand.

"There are homesavailable in the greaterBronkhorstspruit area,including in Montana,Montana Park, MontanaGardens and Doornpoor t,where a three-bedroomhome can be bought forunder R900,000," she says.