Independent Online

Tuesday, June 28, 2022

Like us on FacebookFollow us on TwitterView weather by locationView market indicators

Why people in large, beautiful homes choose to live in decaying suburbs

There are many reasons people choose to keep their beautiful homes in derelict areas. Photo: KVI/Pixabay

There are many reasons people choose to keep their beautiful homes in derelict areas. Photo: KVI/Pixabay

Published May 17, 2022

Share

Often, when driving through derelict areas, one notices some beautiful, large, and well-maintained homes that are clearly loved by their proud owners. But it does lead one to question why they would stay when the suburb around them is falling apart.

The answers, however, vary, says Romona Reddy, candidate property practitioner at Jawitz Properties Eshowe, KwaZulu-Natal.

Story continues below Advertisement

“Some of them see value in their properties, while others are unable to afford to move to a particular area due to property prices being higher.”

Then there are also cases where properties are inherited and the beneficiaries are not allowed to sell them, and cases where homeowners want to sell but are unable to as the existing bond exceeds the value of their property.

Read our latest Property360 digital magazine below

Ynnis Wilson, branch manager at Jawitz Properties Randburg, Gauteng, agrees that there are various reasons people do not move, including memories and family history, financial circumstances, and/or hopes that the neighbourhood will eventually improve – and this, she notes, does occur.

Story continues below Advertisement

Echoing this, David Jacobs, Rawson Property Group’s regional sales manager for Gauteng, says people also understand the costs of moving such as removal fees, and the fact that every new home may have something that needs to be adjusted to the owner’s style.

“All of this adds up, so people sometimes prefer to stay where they are as they are not prepared financially to take on these costs.”

Noelene Snyder, franchisee for Rawson Properties Kuils River, says many people are comfortable remaining in deteriorating suburbs because they are familiar with them. Sometimes they also do not have the capacity to buy or move anywhere else due to their age, or the fact that they cannot afford a home that matches what they currently have.

Story continues below Advertisement

“If you have a home you love and it is paid off, then there is no need to move,” believes Hayley Vann-Herbert, branch manager at Jawitz Properties Southern Suburbs.

“Some areas do go through a little decline but that doesn’t mean it won’t improve again later. On the other hand, some areas can change completely and what you once loved about your home location is no longer the same, and your surroundings no longer match what you require. This is when most clients choose to move.

“If there is a steady steep decline with no foreseeable turnaround, then selling up now is best as future prices may continue to fall. New buyers may not see the changes as negatives for their lifestyles.”

Story continues below Advertisement

She does, however, add that if one chooses to stay and the area gets worse, values further depreciate, and crime increases, then the quality of life at home can decline. There will be more noise and increased costs for home security.

Kyle Newman from Tyson Properties Western Seaboard in Cape Town says that, sometimes, homeowners will decide that even though the area has degraded, they are still happy there and don’t see a need to move.

“Another reason would be, especially if they have a big beautiful house, that they may not be able to sell it and buy something similar, and therefore don’t feel like it is worth it to sell.”

He adds: “I would advise a homeowner to stay if the degradation of the area isn’t major, the area is still safe, and selling just does not make financial sense.”

Some owners are simply not able to afford relocation, echoes Morne Veer, franchisee of Rawson Properties Bellville. This is because property values have grown to all-time highs in most areas and a matching asking price is not obtainable. People are then forced to remain in their current homes and surroundings.

“Owners often take a positive approach or change their mindsets regarding their surroundings, and set out to make the best of a bad situation. They maintain their properties as best they can and make them as comfortable and neat as they possibly can.”

Who would want to buy my home?

These properties will be selling at “far less” than market values of the past, and for buyers with a limited budget, this might be the only option, he says.

“Some buyers are open-minded and see the potential of the area. They know that they could potentially play a role in the future to bring about positive change. However, this will be the exception, not the rule.

“If an area is located close to schooling and the buyer’s place of employment, it could also be seen as a positive, and be a consideration for the buyer to overlook the glaring negatives.”

There will always be willing and able buyers in any area, says Snyder, explaining that buyers would choose to still purchase a good property in a declining area due to affordability.

People always need a roof over their heads, and there is generally a buyer for every property, says Wilson, adding: “As qualified agents, we have a duty to both buyers and sellers in terms of full disclosure.”

Furthermore, even in areas that are neglected, crime-ridden, or undesirable, savvy buyers see opportunities to get “more house for their money”.

Simply put, Reddy says, buyers will purchase a property in an area considered to be run-down because it is what they are able to afford.

“Properties in such areas can sell at very reasonable prices, which appeals to a larger cross-section of buyers; or buyers’ choices may be curbed by what banks are willing to lend them.”

The market will react when the buyers perceive value, Vann-Herbert explains.

“A buyer may be starting out and their affordability is in that range, or they are at a point where they can hold the property for a few years and reap the long-term rewards.

“Each scenario is different for each client based on their needs and perceptions. For example, a busy road is an issue for a lot of buyers, but there are also those who don’t see an issue with it and choose to rather see the value at a slightly lower price of a property they like in lieu of extra road noise.”

Newman also believes that “there will always be buyers”.

“The reason they would still buy despite the negativity is that they might still feel the area is safe and works for them even though it may not be for someone else. The main reason though would be price, as, if an area degrades and prices drop, some clients are only financially able to buy in those areas.”

He says everyone is unique and what one person may regard as a derelict or unsafe area, another may not.

Read our latest Home Improver digital magazine below

How do I spot the signs of neighbourhood rot?

Jacobs says degradation is a common phenomenon in suburbs and early detection is key. This relies a lot on research.

“Very often there is an emotional value to a house, but try not to be emotionally attached to a property. Always look at the financial gain when selling rather than the emotions driving the decision not to sell.

“If it is the right time to sell, then sell. Different municipalities have different outputs in terms of the upkeep of the neighbourhood/suburb, so it is always good to investigate not only the suburb you are buying in but surrounding suburbs that the same municipality is in charge of. Find out if there is a common thread of degradation happening in that suburb especially degradation of infrastructure.”

Vann-Herbert says “something substantial” would need to occur for an area to degrade substantially, but that usually is a slow decline.

“Sometimes an informal settlement, new shops, or transport links may impact an area’s pricing but generally communities and local municipalities are good at looking at area value and current ownership before rezoning is allowed.”

She advises homeowners to research what property prices have been doing in their areas over the past two to three years and note what is currently happening to the neighbourhood or suburb.

“Keep an eye on what businesses are coming in and what clientele they attract. Look at neighbouring properties and their upkeep. Are there new developments coming in, and if so, what types of units and at what selling points?

“Ask yourself: ‘Will it add value to the area?’ Once you’ve done this type of research then you can decide on how best to proceed.”

Snyder says a possible sign of neighbourhood degradation could also be a sudden increase of properties on the market.

For part one of this feature, which looks at when you should sell your home in a decaying area and how much you could lose on it, read this article.

IOL BUSINESS

Share