THE UPSIDE TO SCALING DOWN PAGE 3
These provinces give buyers more bang for their buck
BY BONNY FOURIE bronwyn.fourie@inl.co.zaFIRST-TIME homebuyers in the Western Cape, KwaZuluNatal, the Free State and the north-western parts of Johannesburg, get better value for their money than elsewhere in South Africa.
That, said research economist Dr Roelof Botha in the BetterBond Property Brief last month, was because provinces with greater population density and, therefore, more housing stock, often gave first-time buyers better deals.
The national average price of a home for first-time buyers, based on BetterBond home loan applications for the 12 months ending March 2023, is R1.2 million, says chief executive Carl Coetzee.
Botha says the table below compares the difference in house prices for all buyers with those for first-time buyers, and shows that first-time buyers in four provinces get 20% or more home for their loan.
In greater Pretoria and the south-eastern parts of Johannesburg, it is almost 15% more than other buyers, while in the Northern Cape the price difference is around 10%.
Coetzee says first-time buyers in the Western Cape pay more for their homes than buyers elsewhere in the country, but in terms of price difference between these and other buyers, they are getting more bang for their buck.
“This helps us understand why premiums are being paid in some parts of the country.”
BetterBond data for March 2023 puts the average first-time home purchase price in the Western Cape at R1.5m. A quick search of property listings shows that R1.45m will buy a one-bedroom apartment in the Gardens area of the Cape Town CBD, or a twobedroom apartment in Claremont in the southern suburbs.
In the north-western parts of Johannesburg, the average firsthome purchase price is R1.2m. This would secure a two-bedroom apartment in Linden or North Riding.
In KZN, the average price for a first home is R1.19m.
“KZN offers first-time buyers considerable value for money, with more than 20% difference between house prices for first-time buyers and other buyers,” says Coetzee. In areas such as Morningside, Glenwood and Reservoir Hills, aspirant buyers stand a good chance of finding properties priced below R1.2m.
Purchasing a property is an important first step in using property to create generational wealth, says Rhys Dyer, the chief executive of ooba Home Loans. Even though South African homeowners are tightening their belts following the recent announcement of another 0.5% increase in the interest rate, he says that, in a high-interest rate environment, it is “imperative” to take a long-term approach to property investment .
“And remember that this is all part of a normal interest rate cycle. Interest rates go up, but they also go down. In fact, we have experienced six drops to the repo rate in the past four years alone.”
In South Africa, he says, property remains an attractive asset, and taking a long-term approach to investing is one of the best ways to build generational wealth.
Good deals can be found in high-density areas where more housing stock allows for as much as 20% extra home for the loan
Moving to a smaller home saved us money and made life simpler, more enjoyable
FOR homeowners who took out a R1 million home loan when interest rates were at their lowest in July 2020, their monthly bond repayments are now almost R2 800 more at the current interest rate.
Yet, although it can be difficult, given the last steep interest rate increase, Adrian Goslett, the regional director and chief executive of Re/Max of Southern Africa, says homeowners need to prioritise keeping up with the repayments or risk losing the homes and tarnishing their credit scores.
“If things get too tight, act sooner rather than later.”
To do this, there are several options to bring in extra money to help pay for the higher home loan repayments, one of which is renting out your spare room.
Another, he says, is downscaling to “something more affordable before things get too out of hand”. Living in a smaller space is far more cost effective, which could also help you keep up with the rising cost of living.
“Larger homes often mean
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BY BONNY FOURIE bronwyn.fourie@inl.co.zarunning up larger water and electricity bills than a smaller home would. That translates into more disposable income every month for those who choose to downscale.”
By downscaling, homeowners might also need to sell some of their furniture and other items that might not fit into the new home, which could bring in some extra cash.
“When moving to a smaller home, every square metre becomes essential. This usually means fewer spaces to clean and less space in which to store unnecessary items, which could create a less stressful, less cluttered home,” Goslett adds.
The Coetzee family did just that. Last year, they lived in a large, four-bedroom home with a big office space, huge back garden with a double garage and
outbuilding, a driveway, and decent-size front yard. But for affordability reasons, they moved into a three-bedroom apartment.
It was a huge adjustment but, eight months down the line, they are much happier.
“We had to sell or donate a lot of stuff due to lack of space in our new home, and the kids had to donate almost half of their toys. But they had too much anyway,” Stefan Coetzee says.
“Our water and electricity costs are much lower, cleaning is so much quicker and easier, garden maintenance is a breeze as we only have a small patch of grass where the kids play outside or we braai, and, as we are in a complex-type set-up with electric fencing, we save money on private security.”
He says the children spend more time outside now as they
feel safer.
Grant Smee, the managing director of Only Realty group, says talks of downscaling remain “firmly on the cards, particularly among middle-income earners”.
“Many South Africans capitalised on low interest rates by upscaling and renovating their homes over the past few years. However, the sharp increase in the interest rate has many wondering whether to scale back and cut their losses.
“Rising costs places immense pressure on consumers and will have many relooking their financial position in 2023.”
However, he cautions homeowners to do the maths before selling.
“Having a knee-jerk reaction can cost you more in the long-term, so it’s important
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that you look at all the options available to you prior to making your final decision.”
The FNB Property Barometer for the first three months of 2023 shows that 17% of homeowners were downscaling due to financial pressure.
While the figures were higher in the less than R250 000 price bracket (24.5%) and R500 000 to R750 00 (21.3%) price bracket, even homeowners at the top-end of the home value segment were downscaling.
For sellers of homes valued at more than R3.6m, 12.5% were selling in order to downscale due to financial pressure, while 16% and 16.1% in the R2.6m to R3.6m and R1.6m to R2.6m value brackets respectively were doing the same. The data shows that 16.4% of sellers of homes valued from R750 000 to R1.6m were selling for this reason.
As Coetzee says: “Just because you live in an apartment, maisonette, simplex or duplex, and not a big family home with a garden, does not make your property any less of a home.”
Publisher Vasantha Angamuthu vasantha@africannewsagency.com Executive editor Vivian Warby vivian.warby@inl.co.za
Features Writer Bonny Fourie bronwyn.fourie@inl.co.za Design Kim Stone kim.stone@inl.co.za
Perhaps it’s time to consider scaling back before expenses get out of hand
RE YOU thinking about downscaling?
Looking for an active 60+ community to become part of? Oasis Life Constantia might just be the perfect place for you Let’s look at some key considerations when making this important decision
LOCATION
Situated in the lush green belt of Cape Town and nestled at the foot of the Table Mountain range, Oasis Life Constantia will be settled in a convenient location, with Constantiaberg Mediclinic and several shopping destinations on its doorstep. Located off Kendal Road, residents will be surrounded by abundant greenery as Constantia is dotted with parks and nature reserves, providing ample opportunities for outdoor activities.
LIFESTYLE
Our superb retirement lifestyle is based on hospitality and underpinned by our four security pillars: lifestyle security, physical security, health-care security and financial security. We want you to fall in love with your retirement, from enjoying the comfort of your own private home to the excellent facilities on offer.
Standard Oasis Life features include being pet friendly, as well as beautiful indigenous landscaping and a contemporary age-tailored design in all homes and common areas.
SECURITY
You can enjoy physical security as the estate will be gated, access controlled and manned by security personnel 24 hours a day. In addition, the perimeter has electric fencing and there will be monitored cameras strategically placed at the entrance and common areas.
HEALTH CARE
We offer 24-hour primary health care, which takes the form of on-site consulting rooms in which regular checkups are offered by caring and well-trained nurses.
Every home is also fitted with a 24-hour medical emergency system, which allows ease of calling for assistance at a press of a button. You and your loved
ones can always rest assured that you’ll get the attention you need as soon as you need it.
AMENITIES
JOIN A SUPERB RETIREMENT LIFESTYLE IN BEAUTIFUL CONSTANTIA A
At the heart of the estate, you will find a modern Lifestyle Centre with a deli, bar, multipurpose room, lounge, sunny veranda that spills outside and a primary health-care suite. A heated indoor swimming pool and boutique gym ensure a healthy lifestyle
A resort-type lifestyle is yours for the taking, with a variety of activities, amenities and facilities to choose from. Our outstanding facilities are staffed by friendly, efficient and service-minded people. In fact, all our hospitality staff are trained to hotel industry standards, and you can rest assured that your retirement will be the best years of your life
HOUSING OPTIONS
✦ Free-standing homes from R5.75 million
The free-standing homes, all with double garages and two bedrooms and many with studies, have exclusive - u se landscaped gardens, fireplaces and built-in braai areas on the patios.
✦ Apartments from R2.1 million.
With easy access to the Lifestyle Centre, three low-rise blocks of apartments have undercover basement or garage parking and either one or two bedrooms. All apartments have balconies, with some of the larger ones boasting a balcony from the living room and the master suite.
Ground floor apartments flow out into exclusive use gardens and all the blocks have full back-up electricity.
✦ Oasis Life Constantia is selling off-plan, on a life-rights basis, with occupation estimated between October 2024 to March 2025.
GET IN TOUCH
Schedule a one-on-one appointment with one of our friendly agents who will answer all your questions about Oasis Life Constantia.
Website: www.oasislife.co.za
NIKKI Tel: 082 417 7807
FAITH Tel: 083 950 8883
RONDEBOSCH R2,2 MILLION
RONDEBOSCH R2,8 MILLION
ROSEBANK R1,65 MILLION
RONDEBOSCH R3,1 MILLION
2 - 5 PM.
HILL, 13 GROTTO ROAD.
Art Deco Security Complex in pretty garden setting. Charming Two Bedroomed apartment (99m²) with Fitted Kitchen & Bathroom with Shower Cubicle and Basin. *Separate Toilet. *Many extra features.*Close to Leading Schools, UCT, Shops, Kelvin Grove and Transport.
Small Security Complex. Two Spacious Bedroomed Apartment with lounge leading to large Balcony. Fitted Kitchen & Full Bathroom. *Parking Bay. Close to Dean Street Shops, Restaurant and Jammie Shuttle Stop.
CONTACT:
with Kitchenette, Built-in Cupboards and Balcony. Shower Bathroom. Walk to UCT, Jammie Shuttle, Shops & Transport.
Security Complex in Pretty Garden! Spacious Three Bedroomed Duplex Apartment (115m²) with Two Balconies and Mountain Views! Lounge, Dining Room, Fitted Kitchen (in need of TLC,) Full Bathroom & Guest Toilet. Parking - first come, first serve. *Walk to UCT, Jammie Shuttle, Shops & Transport.
Charming Two Bedroomed Apartment with Fitted Kitchen (with built-in Oven, Hob and Extractor Fan) open plan to Lounge and Balcony. Two Bedrooms with Ample Cupboards. Bathroom with Shower over Bath, Toilet and Basin. **Plus Carport. Academic Mile - Walk to UCT!.
Charming and Large Modernised Three Bedroomed, Two Bathroomed Apartment with Entrance Hall, Lounge and Balcony. Modern Fitted Kitchen with built-in Oven, Hob and Extractor Fan. Close to Kelvin Grove Club, Newlands Cricket Stadium, leading Schools, Shops and Transport.
M A L T A
E U R E S I D E N C E , & R E L O C A T I O N
F R E E S E M I N A R S
FOR SALE
R 1 295 000
2 BEDROOMS | 2 BATHROOMS
SPACIOUS APARTMENT IN DIEP RIVER.
2 bedroom 2 bathroom apartment in Clarewood, Diep River, a short walk to the station, Martins Bakery and other local amenities, above the railway line.
• Fitted kitchen with electric oven, hob and extractor and plumbing for washing machine.
• Open-plan lounge with parquet flooring
•Two double bedrooms with an en-suite bathroom complete with bath and shower. • Covered Parking bay. • Prepaid electricity
ERF: 1471m2 | HOME: 70m2 | RATES: R 450 p/m | LEVIES: R 1500 p/m
PLEASE CONTACT: Collin Mbiriri on 071 879 8564 or email cmbiriri@gmail.com or mmnyandoro@gmail.com
AGENTS’ DIRECTORY
DOGON GROUP PROPERTIES
Atlantic Seaboard Office 021 433 2580
thekings@dogongroup.com
www.dogongroup.com
RHONDA RAAD PROPERTIES
Cape Town Office 082 448 7795
Email: rrpsales@mweb.co.za
www.rhondaraadproperties.co.za
SHELLEY RESIDENTIAL
KZN
Office 082 412 4463
Email: hello@shelley.co.za
www.shelley.co.za
DOGON GROUP RENTALS
Sea Point Office 021 433 2580
enquiries@dogongroup.com
www.dogongroup.com
DE PLATTEKLOOF
Cape Town 060 960 0100
Email: live@deplattekloof.co.za
www.deplattekloof.co.za
IRENE PORTER PROPERTIES
Simon’s Town Office 021 786 3947
Debbie 073 140 2543
www.ireneporterproperties.co.za
DOGON GROUP PROPERTIES
Southern Suburbs, Claremont Office 021 671 0258
southernsuburbs@dogongroup.com
www.dogongroup.com
PETER MASKELL AUCTIONEERS
KZN
Office: 033 397 1190
Email: info@maskell.co.za
www.bidlive.maskell.co.za
MURAMBI HOUSE
Wynberg Office
murambihouse@telkomsa.net
www.murambi.co.za
Address:
DOGON GROUP PROPERTIES
Western Seaboard
Office: 021 556 5600 or 021 433 2580
enquiries@dogongroup.com www.dogongroup.com
VAN’S AUCTIONEERS
Gauteng Office 086 111 8267
www.vansauctions.co.za
www.iolproperty.co.za
WIDENHAM RETIREMENT
VILLAGE South Coast, KZN 066 306 0669 / 066 306 0612
www.hibiscusrv.co.za
www.widenhamretirementvillage.co.za