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Johannesburg - House prices will take some time to recover and could turn up at a low of as much as -5% only in the middle of next year.
This is the view of Pam Golding Properties (PGP) CE Andrew Golding on the housing market, where sales volumes are currently under severe pressure.
But he reckons the market is offering golden opportunities for smart buyers with available funds.
He says total residential transfers declined to about 25 000/month from the 35 000/month for the last quarter of last year.
"Transfers in which bonds had to be registered declined even faster than those without bonds, which have remained relatively constant since 2004," he said.
Against this background opportunities are beckoning in a couple of red-hot areas countrywide, where with capital can invest.
At the apex of the housing market remains the top investment destination in the country for super-rich investors, Cape Town's Atlantic Seaboard. "Prices of up to R50m are not unusual in this sought-after area, and sales are usually cash," he says. In Gauteng, Sandhurst is one of the exclusive areas where houses also go for R50m or so.
He believes, however, that an investor in any seafront property can get a good return.
"In KwaZulu-Natal the south coast offers good investment opportunities with very affordable properties." He says careful investors who paid R250 000 for a property in Margate and the surrounding area 15 years ago will be surprised to learn that these properties are now changing hands for R2.5m or more.
But he says that the "new south" of Johannesburg is the best kept secret in the greater Johannesburg area. This includes Glenvista, Bassonia, and Meyersdal in Alberton. "When a comparison is drawn with the northern suburbs, similar houses in the "elite" southern areas cost 50% less."
PGP's recent sales in the area reflect a strong demand for entry-level houses at about R550 000, while houses at the top end of the scale of fetch up to R12m. The company recently achieved a record price of R6.5m in Bassonia.
He is confident that the South African housing market will eventually recover fully. "We are in a far better position here than the US, where prices in some areas have fallen 40% - and in Britain 25% over two years."
- Sake24