Johannesburg - In one of the biggest property auctions to date rows upon rows of West Rand dwellings will soon come under the hammer.
This mass auctioning of an astounding 611 units is the result of Philken Building Construction, one of the biggest developers in the area, having been liquidated after being caught unawares by the economic downturn.
The West Rand has been one of the fastest-growing residential areas in the country for the past 10 years.
John Loos, property analyst at the home loan division of First National Bank, says many players in the residential market did not expect the economy to slow down to such an extent after its strong growth in recent years.
Erwin Rode, property valuer and economist from Rode & Associates, says the massacre is a symptom of the pain the housing market is experiencing.
"It's ironic that insolvencies are still happening after interest rates have fallen so sharply."
The situation is caused by the lag between economic activity and insolvency.
Rael Levitt, chief executive of the Alliance Group, which will conduct the auction, says it's the group's biggest liquidation auction so far and a once-off opportunity for homebuyers as well as investors to snap up bargains.
This is particularly so in the light of banks having recently adjusted their lending criteria to make access to housing finance easier.
Some of the units already have tenants, rendering them a good investment opportunity with an immediate income stream.
Rode says it's a good opportunity to find a bargain. "If a unit can be bought at a 30% discount relative to market value, it's an option to consider."
The units, which have been designed for the middle to higher income group, are divided into three developments.
These include a residential block with 64 units in Lakeview in Florida, 40 luxury cluster units in Eagle Falls Amarosa in Ruimsig, and a massive total of 507 sectional-title units in Honeydew Gardens in Honeydew.
The Lakeview units include 52 bachelor apartments and 12 one-bedroom units that can generate rental income.
Honeydew Gardens comprises four separate complexes: Ironwood with 97 units, Redwood with 136, Rosewood with 100, and Sagewood with 174, which are not yet entirely complete. Levitt says the apartments mostly have two or three bedrooms. He believes these have good rental prospects, especially as they are close to Monash University. Some students are already renting units.
The auction will be held on October 1 in the Radisson Blue Hotel in Sandton.
- Sake24.com
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