Buy land in her­itage sub­urbs, in­vestors ad­vised

Weekend Argus (Saturday Edition) - - PROPERTY -

ALTHOUGH buy- to- let prop­erty devel­op­ment in newly­built com­plexes is slowly start­ing to pick up again, in­vestors would do well at the mo­ment to fo­cus on pre-owned homes with large gar­dens in the her­itage sub­urbs of South Africa’s ma­jor cities.

So says Lew Gef­fen, chair­man of Sotheby’s In­ter­na­tional Realty in South Africa, who notes that there are two fac­tors work­ing in con­cert that will boost the value of such prop­er­ties over the next few years.

“In the first place, the new spa­tial plans for our large cities lean heav­ily to­wards den­si­fi­ca­tion and bet­ter use of their land and re­sources to ac­com­mo­date the rapid ur­ban­i­sa­tion of SA’s pop­u­la­tion. And this pre­dis­poses city coun­cils to the sub­di­vi­sion – within lim­its – of the very large stands that were pre­vi­ously com­mon in af­flu­ent s u b u r b s l i ke Bryanston, Houghton, Mel­rose and West­cliff in Jo­han­nes­burg, and the southern sub­urbs of Cape Town.

“This pol­icy was un­der­scored re­cently in the medi­umterm bud­get re­view pre­sented to Par­lia­ment by Fi­nance Min­is­ter Pravin Gord­han, in which it was an­nounced that SA’s eight large met­ros are to get more than R350 mil­lion worth of ad­di­tional fund­ing over the next two years. This is specif­i­cally to ad­dress aparthei­dle­gacy spa­tial plan­ning is­sues and en­able poorer fam­i­lies to live closer to city cen­tres and work op­por­tu­ni­ties.”

Sec­ond, he s ays, s t e e p in­creases in prop­erty rates and main­te­nance costs over the past few years, as well as se­cu­rity con­cerns, are prompt­ing many wealthy home­own­ers to con­sider mod­ern clus­ters or lux­ury sec­tional ti­tle homes as al­ter­na­tives to large houses.

“Gen­er­ally they are not, how­ever, will­ing to com­pro­mise on their qual­ity of life, prop­erty value or lo­ca­tion in their search for more com­pact, more man­age­able prop­er­ties.

“On the con­trary, many ap­pear will­ing to pay a pre­mium to re­main in the fa­mil­iar sur round­ings of t he more af­flu­ent sub­urbs, and therein lies a real op­por­tu­nity for as­tute in­vestors and de­vel­op­ers.”

In fact, says Gef­fen, his ad­vice to prop­erty in­vestors right now is to buy as much land as they can in the best ar­eas they can af­ford be­cause sub­stan­tial land parcels in sought-af­ter ar­eas are set to be­come a rare com­mod­ity.

“Mean­while, those for­tu­nate enough to al­ready own large stands in the her­itage sub­urbs ar­eas should se­ri­ously in­ves­ti­gate the pos­si­bil­ity of sub­di­vid­ing them and de­vel­op­ing them to ac­com­mo­date three or four homes – one for their own use, per­haps, and the oth­ers for sale or to let.”

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