DURBAN - Whilst South Africa’s economy is technically in a recession, given two consecutive quarters of negative growth, there is an optimistic sentiment in the housing market.
This is even more surprising when considering other negative factors affecting economic growth.
Craig Hutchison, Chief Executive of Engel & Völkers Southern Africa said, "On the ground, although consumers are seeing a current tough economic climate there is sentiment of a bright future, especially where it concerns the property market".
Hutchison added that the market remains robust, particularly in the main metropoles where a younger demographic is seeing the value in owning property.
Cost to build
According to Stats SA, the North West has the cheapest construction costs in South Africa currently, while KwaZulu-Natal the most expensive. The average building costs in the North West amount to R5 060 per m2, while construction costs in KwaZulu-Natal come in at R9 610 per m2.
The costs of renovating a property will vary depending on the project at hand, however in most instances will be substantially lower than the per m2 costs described above for a new build.
Key investment areas
"The growth in residential property prices in Gauteng and Kwazulu-Natal has gradually rebounded after a number of slow years, with the East Rand showing the strongest recovery of the Gauteng metropolitan areas," said Hutchison.
FNB’s estate agent survey shows that the Gauteng residential market remains the strong point in South Africa in terms of stability. Homes in Pretoria sell in just over 11 weeks, compared to the national average of approximately 16 weeks.
Significantly, Pretoria is the fastest growing South African metro economy and is ranked 35th on a list of 300 of the world’s biggest metro areas, according to Global Metro Monitor.
Demand for sectional title living
Gauteng is experiencing a rising demand for sectional title units, many of which have been developed with convenience in mind. Many sectional title developments are mixed-use and provide numerous amenities.
They are also opportunely positioned for easy commute to work, school and retail. Locations such as the greater Fourways area, Midrand and Centurion continue to be sought-after as they are well-priced and present an excellent investment.
"New builds and renovations are valuable investments, and have the potential for considerable capital growth when the time comes to consider selling," concludes Hutchison.
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