Steyn City sales slow to a trickle | Fin24
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Steyn City sales slow to a trickle

Sep 25 2016 06:29
Justin Brown

Property sales at the multibillion-rand Steyn City residential development have decelerated after the first year since the estate was launched, as hype has subsided and as growth in the economy has slowed.

Giuseppe Plumari, Steyn City Properties CEO, said during a tour of Steyn City that the slowdown in the economy had affected sales at the estate, but investment would continue.

Further phases of property construction at the estate would “rest on market recovery”, Plumari said.

“It is a turbulent time and the market has not settled,” he said.

In the year from March 5 last year, when the development was launched, properties worth R1.5 billion were sold.

However, in the more than six months since March this year, property sales have amounted to only about R100 million, bringing total sales to R1.6 billion.

Lambert Bezuidenhout, a Pam Golding agent specialising in Steyn City sales, said the pace of sales had dropped after the first year as the launch was preceded by a two-year marketing campaign, which resulted in higher demand.

“After the launch, there was a flood of people interested in the estate. This is to be expected – getting in early is vital. Those who got in first have seen a significant increase in prices. We are now beyond the pre-launch hype,” Bezuidenhout said.

Sales at the estate were doing “quite well” relative to the rest of the property market, which was “very slow”.

“We are ticking over comfortably,” Bezuidenhout said.

Pam Golding was selling Steyn City properties of between R20 million and R30 million every month.

Mark Williams, a property agent at Kent Gush specialising in Steyn City sales, said that it was natural at any new development that there would be a slowdown in sales after the “low-hanging fruit” was sold.

Bezuidenhout said Steyn City would benefit from the development of the Fourways Precinct, which included the upgrading of the Fourways Mall.

More than R8.2 billion has already been invested in infrastructure and properties at Steyn City, and Plumari said the total investment would be in excess of R50 billion.

Marie Yossava, a Steyn City spokesperson, said that of the first R6.6 billion, nearly R2 billion had been spent on upgrading external roads and bulk services such as sewerage works and a water reservoir, while a further R4.6 billion had been spent on land, built product, internal services and structures, the environment, landscaping, bulk electrical projects, sewerage, facilities and the golf course.

A further R1.6 billion had been spent on bulk services, Yossava said.

Those wanting to buy into the estate have three key options: an apartment, a cluster or a vacant property stand on which they could construct a home.

Since the launch in March last year, 198 apartments have been put on the market, as well as 79 clusters and 278 stands.

More than 300 units across the different property types have been sold, Plumari said.

In the long term, about 6 000 properties were likely to be constructed at Steyn City, but this could be increased to as many as 10 000 properties, he added.

Bezuidenhout said that over the long term, the mix of properties was likely to be 15% properties built on stands and 85% either of apartments or clusters.

He said buyers of properties at Steyn City came from those already living in the area, but also from other parts of Johannesburg.

“It’s a diverse mix,” he said.

Depending on the mix between apartments, clusters and free-standing homes, the estate could ultimately be home to as many as 20 000 people. It is expected to be developed over the next 15 years or longer.

Bezuidenhout estimated that about 140 people were living at Steyn City.

The estate owns 2 000 hectares of land in Dainfern, north of Johannesburg.

Given the large expanse of land, the estate has considerable bird life, as well as game, and art sculptures dot the estate.

The development, which targets the wealthy and middle class, has a golf course, an equestrian centre, indoor and outdoor gyms, mountain bike trails, a skate park, tennis courts, cycle tracks and children’s play parks.

The estate also has rugby and soccer fields, and the Jukskei River flows through it.

Plumari said a Spar store was also planned.

A high school and primary school that will house 400 to 500 schoolchildren is being constructed and a shopping centre is being built next to the school.

A commercial office park covering about 55 000m² is also going to be launched this year.

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