New houses hard on the pocket
If you want to build your dream home from scratch instead of buying an existing one, be prepared to fork out at a whopping 45% more. That translates into an additional R629,500 if one takes the average-priced and -sized home as a benchmark, according to latest figures from Absa.
The bank’s housing review for the third quarter shows that the cost differential between new and existing homes has risen sharply over the past 12 months following rapidly rising building and land costs.
The average price of a new house rose by 16.1% in the third quarter year on year to R2,020,200. In contrast, the average price of an existing house increased by only 3.5% in the third quarter to about R1,390,700.
Absa Home Loans housing analyst Jacques du Toit says an acceleration in building cost inflation and higher vacant land values over the past six months or so may have contributed to much higher price growth for new houses. At the same time, nominal year-on-year growth in the average price of existing homes has been on a slowing trend since the fourth quarter of 2014.
Du Toit says factors affecting the market for new houses include the prices of building material, labour and transport, as well as developer and contractor profit margins, the cost of developing land for residential purposes and property holding costs.
In the middle and luxury segments of the housing market, land values alone have risen by 14.1% in the third quarter. That brought the price for the average residential stand to about R736,300. Du Toit notes that the cost of land as a percentage of total building costs is typically at 28.6% in the middle and luxury segment of the market.
“The demand and supply of suitable and serviced land for development, the availability and accessibility of transport infrastructure and the proximity to places of work, schools, shopping centres and medical facilities are all factors that have over time caused substantial upward pressure on land prices for new residential greenfield and/or brownfield developments, especially in the major metropolitan areas of the country.” plans to help make the centre of Sandton more bike-friendly. But six short months after the company launched its electronic bike hub project in Sandton earlier this year, more than 1,000 bike-share trips had been clocked up. That’s despite a relatively small starter fleet of only 20 bikes, provided by GreenCycles, and two solar-powered docking stations.
The bikes are stationed at Growthpoint-owned Sandton office buildings The Place at 1 Sandton Drive and at 138 West Street, opposite the Sandton Gautrain Station.
Intended for short trips around central Sandton, a bike can be pre-booked and used for several hours before it needs to be returned to the docking station. The bikes provided are free for use by anyone, and not one has gone missing.
Each bike is fitted with an electric motor and a lithium-ion battery that can be charged like a cellphone.
“As a responsible property owner, manager and developer Growthpoint is acutely aware that as our suburbs and cities expand, traffic congestion will intensify. E-bikes contribute to lower CO2 emissions, cleaner air, and less traffic congestion. They’re also convenient, free and fun,” says MD Estienne de Klerk.
Meanwhile, executive director of transport for the City of Johannesburg Lisa Seftel has confirmed that the proposed cycle lanes from Alex No 3 Square to the centre of Sandton are going ahead, including several routes within central Sandton itself, such as parts of Maude and West streets.
That’s despite the new mayor, Herman Mashaba, recently announcing that he would reallocate R70m set aside for bicycle lanes around Johannesburg for projects in Alexandra township.