Soweto has one of the fastest appreciation rates in Johannesburg, with homes in the area doubling in price over the past ten years.
This is according to Seeff Property Group, which highlighted the growth in demand for property in Soweto and why this is the case.
Licensees for Seeff Soweto Khosi Sibiya and Phindi Mphahlele noted property values have grown notably faster compared to the rest of Johannesburg, basically doubling over the last ten years, making property in the area a good investment.
They added that this meant there was a strong demand for property – both to purchase and to rent.
According to Lightstone data, over the past year, more than 2,000 property transactions in Soweto worth over R1.1 billion have been recorded. Generally, over 40% of buyers are under 35 years old, with most being first-time buyers.
“While the majority of properties are freestanding, there is growing interest in estates and sectional titles as urbanisation and densification continue,” added Khosi and Phindi.
Samuel Seeff, chairman of the Seeff Property Group, also noted that the biggest advantage remains in terms of excellent affordability despite the appreciation of property prices over the last decade.
“It enables people to get onto the property ladder and build wealth, ” he said.
“On top of that, the high demand for rentals provides an incentive to invest in property for the rental market,” he added.
The group noted that the majority of the transactions are currently below R1,000,000 and that almost all of them fall below R1.5 million. Only ten transactions have been registered above R3 million.
The more exclusive areas include Diepkloof, which has an average price of R2 million, Dobsonville at R1.5 million, and Pimville at R1 million.
The affordability is well illustrated, considering that you can purchase a four-bedroom home with a garage and three flatlets in Dobsonville for R1.4 million, said Khosi and Phindi.
A top-end property in Diepkloof with three bedrooms and two garages is priced at R1.649 million.
Additionally, property taxes tend to be lower compared to other Johannesburg areas. If you buy below R1.1 million, there is the added benefit of no transfer duty.
Although Soweto is considered a township, it is the biggest one in Africa with some 37 suburbs, which are home to over 186,000 properties, more than double compared to 1994, according to Lightstone data.
It is a great area for affordability, and these days, Soweto is a popular residential neighbourhood for its excellent amenities and access to schools and transport.
It is also popular for student rentals due to the proximity to Wits and UJ, as well as the medical staff associated with nearby hospitals. Tenants who start out renting are often later able to buy in the area as their economic circumstances improve.
Source:BusinessTech
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