Value for money and low interest rates lead investors and first-time homebuyers to invest in Midrand – Gauteng’s new boomtown conveniently located halfway between Johannesburg and Tshwane
WORDS: HELÉNE MEISSENHEIMER – IMAGES: SUPPLIED
The past couple of years have seen Midrand becoming a sought-after area for investment in Gauteng. Centrally situated between Johannesburg and Centurion, with easy access to main roads and highways and the Midrand Gautrain station, its location adds to its desirability. It’s 20 minutes away from Sandton and an hour from Tshwane. Adding to the attraction is Midrand’s many entertainment and medical facilities, shopping centres, places of worship and excellent schools all within close range. Residential property sales appear to have received a further boost during the pandemic.
The work-from-home experience for many families, often with children who needed space to play and study, made parents realise the need for more spacious accommodation. “Insufficient space to accommodate everyone’s needs when the whole family is at home most of the time, has been a common frustration during the lockdown and has already prompted many relocations to bigger homes,” says CEO of the Chas Everitt International property group Berry Everitt.
The current low interest rates coupled with the banks being keen to approve home loan applications and a zero-transfer rate on property of up to R1m, are further encouragement for investors and first-time homebuyers. Midrand, with its expanding range of affordable residential developments is one of the areas where people have found more spacious homes at the most affordable rates. “Over the last few years, the Midrand area has experienced a property boom, and it seems even stronger now that South Africans have been through the recent Covid-19 pandemic,” says Century Property Developments‘ head of sales, marketing and operations Jessica Hofmeyr.
Developers report that freestanding homes and sectional title properties are particularly popular with buyers eager to find affordable homes with space to work from home. Rentals with free Wi-Fi, vital for working from home and home schooling, are also in demand. Property investors can expect a solid return on investment in Midrand. Lightstone data shows that over five and 10-year periods, sectional title prices in Erand Gardens, Noordwyk and Vorna Valley have consistently shown good growth despite a slow growth in prices nationally. Sectional title prices have grown by over 40% in the last decade.
Working from home was already a growing trend before the Covid-19 pandemic. Despite lockdown restrictions easing up, it’s expected that many people will continue working remotely and will need a dedicated space in their home to do so. Consequently, developments with affordable freestanding homes are popular. Anticipating an increased demand in this housing category, Craft Homes did a virtual launch of their new security estate The Woods in May when the country was in hard lockdown. Their duplex homes sold out in four days, according to Craft Homes’ marketing manager Jessica Cabanita. “We did our research and knew that freestanding houses would do well,” she says. “Most of our buyers have young families and are looking to upgrade from an apartment.”
Prices of homes in The Woods vary from R1,2m for a two-bedroom apartment with a built-in braai and study nook to a three or four-bedroom home for R2,19m. There’s a waiting list should any of the two and three-bedroom properties become available. The estate offers an 866m green belt area where residents can walk their dogs, jog or cycle in safety. The Woods is located next to the Kyalami Corner Shopping Centre with easy access to the N1 and with good schools in the vicinity. Midrand is also a popular choice for retirees looking to downscale to a smaller home in a safe environment close to shopping centres and medical care. An example is the Urban Ridge South Retirement Estate, located in Halfway Gardens with quick access to the N1 and on the Gautrain route. Lightstone lists the estate (with 232 transactions since 2018) among the top-three most popular retirement estates in the country.
Sectional title properties, especially those below R1m, are in demand from first-time buyers and buy-to-let investors. Research by Lightstone shows sectional title unit sales in Gauteng have risen from 53.6% of total home sales in the province in 2010 to 59.1% in 2019. Last year, properties priced below R800,000 accounted for 51% of total sectional title unit sales, while properties priced between R800,000 and R1,5m accounted for 36.1% of sales.
In Erand Gardens and Noordwyk, prices start from R420,000 for a bachelor’s apartment, R500,000 for one-bedroom units, R590,000 for two-bedroom units and from R850,000 to R1,15m for a three-bedroom apartment. In the established suburb of Vorna Valley, prices start from R680,000 for a two-bedroom apartment and can vary up to R850,000. According to Pam Golding Properties area specialists Fushai Runyowa and Reggie Toolo, in Vorna Valley particularly, there’s increased demand for two-bedroom, one-bathroom apartments and a shortage in stock of two-bedroom garden units as most young families prefer these where children can play in the garden. Rentals start at about R6,700 per month.
Nearby sprawling development Steyn City has also seen an uptick in sectional title sales. According to Lambert Bezuidenhout, Steyn City sales manager, the apartments are especially appealing for buyers who want access to top facilities, the convenience of a lock-up-and-go lifestyle and the additional space to accommodate a work-from-home set-up. “There are a couple of factors which contribute to the shift of sectional title sales into higher price bands, including rising house prices and building costs, strong demand from first-time buyers entering the market and the growing lifestyle shift towards downsizing. “These factors all see homeowners across price bands embrace the benefits of a lock-up-and-go and live-work-play lifestyle,” says Sandra Gordon, senior market and research analyst, Pam Golding Properties.
Being forced to spend time at home due to the pandemic caused people to reflect on their home environment choices. Lifestyle estates offer homes on spacious well-kept grounds that often include schools and a variety of recreational facilities. Hofmeyr believes this is the reason for the increase in sales in an area like Waterfall Estates where the development is centred on lifestyle facilities. “The pandemic seems to have shifted people’s perceptions: turning one’s home environment into a bigger priority than driving the latest model car, for instance,” she says.
Steyn City’s new residential development, The Village, is another example of an offering for families in Midrand looking for alternative lifestyle options. Located within walking distance of the estate’s schools and close to recreational facilities including an indoor aquatic centre, equestrian centre and the Dino Park, stand prices range from R3m to R18m. Although the country’s rental market is under pressure, Midrand’s estates continue to be sought-after for rental accommodation. Hofmeyr says they’ve seen a sharp increase in demand at Century Property Developments, while for Steyn City Bezuidenhout reports that although their apartment rentals have dropped slightly to accommodate tenant expectations, they are still attracting high prices and good returns for their larger homes, which are achieving over R100,000 in monthly rentals.
Despite the muted price growth seen for the last few years in house prices in most parts of the country, residential developments in Midrand report a healthy increase in value. For example, two-bedroom apartments that sold for R950,000 two years ago in the multi-award winning Waterfall Ridge development, are now selling for R1,1m. According to Cabanita, most of the 294 apartments here have been sold and they are now registering Phase 3 of the development. “The future of property investment in Midrand is definitely looking bright,” she says. With the interest rate currently at 7%, the lowest it has been in decades and the expectation that the Reserve Bank will keep it low for a while to help rebuild the struggling economy, this is definitely a good time for property investors and first-time homebuyers to buy in what is fast becoming Gauteng’s new boomtown.