Great investment opportunities in Pretoria
ven though the Covid-19 pandemic has had an impact on the property market across South Africa, there are still significant investment opportunities to be had, especially in the residential sector. In line with this, Pretoria has emerged as an attractive destination with several areas showing great potential for growth, says Keabetswe Nkotswe, portfolio manager, TUHF. “There’s been steady progress, but it really has been an ongoing process of forging relationships with key stakeholders at local government, the municipalities, property developers, universities and other role players to identify the hotspots. We’re focusing on the inner city, but the likes of Silverton, Sunnyside, Capital Park and others have emerged as great investment opportunities,” says Nkotswe.
One of the major trends has been interest in family-led units in Pretoria West. However, Arcadia, Sunnyside and Gezina have proven popular with younger families looking to share accommodation with friends. A central theme behind this growth has been easy access to amenities and transport to the Pretoria CBD, Nkotswe says.
Of course, the amount of higher learning institutions in Pretoria makes it attractive for student accommodation as well. But there is concern that student housing might be in a bubble that could burst at any stage. As such, there is a focus on residential accommodation – that lends itself to being adaptive if need be – as opposed to the more traditional student-residence type.
“With Pretoria generally being cleaner and more laid-back than Johannesburg, families are finding great appeal there. Convenient access to shopping centres, banks, churches, schools and transport, not to mention the nightlife in different parts of town, are all contributing to making Pretoria the perfect springboard for investment and for the post-pandemic new normal,” she adds.
Style and comfort
It is particularly multiple-bedroom units with spacious kitchens and lounges that have been in demand. The reason being that multiple individuals can rent them and have a ‘lock up and go’ setup. This is ideal for those who are staying in the inner city for work and going home over the weekends.
“Given how the pandemic has resulted in many people losing their jobs, they are looking to downgrade to smaller spaces that are more affordable. And the best thing is that these multiple bedroom units are future-proof to transition into family-led environments when the time comes,” says Nkotswe.
There are plenty of deals to be had, but the challenge has been for investors to come up with the required equity. Nkotswe says that many exciting buildings are becoming available in the market. “With the work from home environment being part of the new normal, many offices and commercial buildings are available. These provide brilliant investment opportunities to convert into residential spaces.”
“The inner city is especially exciting for us. We have been very proactive in being on the ground and engaging with the community – from building managers to shopkeepers and other people who know the areas and understand the dynamics at play. We are passionate about community engagement, which also becomes a great awareness driver for us,” says Nkotswe.
An artist’s rendering of Ihlathi development in Parklands, Cape Town
Less red tape to access subsidy for new buyers
property developer is helping South Africans earning under R22,000 a month access an under-utilised government housing subsidy to assist those wishing to become first‑time homeowners. The government’s Finance Linked Individual Subsidy Programme (FLISP) helps qualifying first-time buyers caught in the ‘gap’ sector – those who historically earned too little to buy property – with financial support.
Property expert Toni Enderli says FLISP subsidies, combined with the lowest interest rates in 50 years, transfer duty relief and higher home loan rate approvals, mean many families who rent may now be able to buy into the affordable housing bracket for the first time. Responding to reports of bureaucratic challenges in accessing FLISP subsidies, Enderli says International Housing Solutions (IHS), developers of the entry-level, innovative and eco-friendly gated community, Ihlathi, in Parklands in Cape Town has appointed dedicated FLISP agents to help. “Many who qualify are not accessing FLISP funding due to various challenges. Our FLISP team is helping them buy their first home in Ihlathi by taking away the administrative pain,” says Enderli.
Realtor of Excellence’s development sales director Wayne Lawson says, “Low interest rates, no transfer duty or fees, higher loan rate approvals, attractive entry-level offerings and FLISP subsidies offer unprecedented opportunities to prospective home buyers. Monthly repayments for one-bedroom units (priced from R699,999) at Ihlathi are under R5,500 per month, compared to R7,500 a month to rent a similar space.î Two-bedroom units start from R779, 999 and three-bedroom units from R1,249,999.
IHS’s SA MD Rob Wesselo says Ihlathi is certified by the green building council and includes solar geysers, fibre-ready internet and 24-hour security monitoring. “In addition to affordability, you’re buying into a safe, secure and ideally located community on a green belt. This value is unprecedented.”