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A two-year logjam in the property market has at last been unblocked due to increased lending by banks.
So says Julie Davison-White, who notes that the vital key to this shift is bank lending to first-time buyers to acquire homes priced at around R350 000 in areas such as Tembisa, Kaalfontein, Ivory Park and Ebony Park, to the east of the N1 freeway.
“First-time buyers with good credit records are now able to get 100% bonds to buy these properties, and of course there is no transfer duty payable on homes costing less than R500 000, so there are lots of sales now taking place in these areas.
“And that is enabling the sellers of those homes to come and buy properties in Midrand, which they are doing in ever-increasing numbers in suburbs such as Noordwyk, Vorna Valley and Halfway Gardens, to the west of the N1.
She says the properties most in demand among the incoming buyers are freestanding or stack simplexes in secure sectional title complexes, at prices in the R450 000 to R550 000 range – the owners of which are then free, in their turn, to upgrade to clusters and freehold homes in the R650 000 to R900 000 price range.
“In other words, the market has changed back to its normal dynamic and completely altered the picture of the past two years, during which we sold large numbers of distressed properties in co-operation with various banks, and in very many cases saw the sellers of those properties leave the market altogether or at best become tenants.”
Davison-White says that buyer numbers in Midrand are also being supplemented now by people choosing the area for its strategic location between Johannesburg and Pretoria. “For example, people who live in Pretoria and currently commute to Johannesburg every day would like to avoid having to pay the new tolls shortly to be introduced on this route, and of course cut the hours they spend in very heavy traffic.
“However, Johannesburg has its own traffic congestion problems, and Midrand definitely has the price advantage over areas that would otherwise be the target of such buyers such as Sunninghill and Fourways. It also has several excellent schools and top-class shopping centres within easy reach of home – not to mention its own Gautrain station.
“Consequently, we are expecting further steady growth in demand here over the next year, and an increase in sales of houses in the R850 000 to R1,5m category, provided that these are well-priced by the sellers and that the buyers have cash to cover deposits of between 10 and 20%.”
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