Township RDP house prices more than doubled after hard lockdown - agent

The township property market also followed the footsteps of the country’s property market after lockdown, say experts. Picture: Ayanda Ndamane/African News Agency (ANA) Archives

The township property market also followed the footsteps of the country’s property market after lockdown, say experts. Picture: Ayanda Ndamane/African News Agency (ANA) Archives

Published Aug 4, 2021


The township property market has had pockets of hope since Covid-19 hit our shores.

Prior to Covid-19 the rental market - and build-to-rent market was thriving with many landlord-developers making extra cash by renting in their backyard, or building double-storey micro apartments to rent out.

And now agents in the area say that after the hard lockdown was lifted RDP house values more than doubled in some areas.

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Mohau Motaung, broker/owner of Re/Max Ebenezer says the majority of RDP homeowners would previously hold onto their houses because an average RDP home was selling for R150 000. “After lockdown, prices doubled and they are now selling for an average of R320 000 which has created a temptation to sell.”

However, Motaung explains not all RDP are sellable. “Some have a condition placed on the title deed that they can only be sold after 10 years after the issue of title deed. Some are not for sale at all because they have a clause that says they will remain family houses and that endorsement seems impossible to waive.”

The township property market also followed the footsteps of the country’s property market after lockdown.

Regional director and chief executive of Re/Max of Southern Africa, Adrian Goslett says when the hard lockdown was lifted the property market saw a period of unprecedented activity as low-interest rates and pent-up demand drove the number of sales through the roof.

This was felt in the township market as well, says Motaung.

But, he says purchasing homes in the townships through home finance are hard to come by in these areas. “I would say that banks do not easily approve home loan applications in township markets.

“In view of the fact that I am also a debt counsellor, I can mention that the banks are extra careful to lend in these areas as they stand to lose the whole investment should it be found that the bond was granted recklessly,” says.

Motaung has also noticed that since Covid-19, some have chosen to stay with a partner or return to their parents and rent out their own house to generate some money to help the other parties make ends meet.

“There are also these so-called ‘investors’ who put down the offer but never take transfer. Instead, they resell the property to other buyers at a higher price, making themselves huge markups. Lately, we have also seen a lot of cash buyers for high amounts as there have been many people who were paid out when they were retrenched due to Covid and for other reasons,” he says.

The perception that there is a shortage of sellers in township markets stems from the fact that some do tend to hold onto their homes to pass on to the next generation.

“This happens in the so-called ‘traditional’, older four-roomed houses in Soweto, but not within the new developments. Owners of the latter would always opt to sell. Interestingly, I have found that single mothers tend to buy the house for the child that they had earlier in life out of wedlock. Should they later get married, they prefer to keep the house for that child. But, children who are born from the marriage are thought to be okay.”

In the Cape’s township markets, Lebo Masilo of Re/Max Impact says that in the more established areas, such as Gugulethu, Nyanga and surrounds, communities tend to keep their homes as they have built them up and modernised them over a few generations.

“Also, the security structures seem to be more established in the older areas, which makes it less attractive to sell. Many choose to keep these homes as a generational family home, even though the younger generation tends to move to more upmarket areas in the suburbs,” she says.

“In areas like Khayelitsha where crime is on the increase, those who can afford to do so are selling much faster so that they can move to safer, more upmarket areas. Many who have been given the title deeds to their RDP homes are also selling them for bigger houses,” Masilo adds.

Cynthia Ngxanga of Re/Max Advance operates in Umlazi in KZN, agrees that there is a desire to move away from the townships if one can afford to so do.

“There is no shortage of sellers in our township markets because many want to move to the suburbs and now they are selling their houses. When they received their title deeds to their RDP houses, some of them sell and some don’t. Despite this, there are always clients who want to buy in townships because they can.

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