Growth influencing home buying trends is a very positive thing for property investors #BuildALegacy
Johannesburg is growing – perhaps twice as fast as the national average. That in itself, is no bad thing. Unless of course you have to sit in the city’s traffic everyday.
The fact of the matter is commuters are spending ever increasing amounts of their time and salaries on petrol, travel and car maintenance. And with thousands of new cars on our roads every month, it’s not surprising that home buying patterns in the city are now being influenced by travel considerations.
Local estate agents concur with many saying that more and more people are purchasing property based on their commuting patterns. Of course the fact that hefty travel costs now directly affect how much a person can afford to put towards a bond and utilities is also playing a role.
Area and position have accordingly become even more important when it comes to home buying considerations. So much so in fact that people are snapping up homes in more expensive areas of town simply so that they can be close to work.
A future possible scenario stemming from Johannesburg’s increasing growth is that demand for older, more ‘established’ homes in areas closer to places of work will increase. Older homes tend to be less expensive than new builds so that’s a bonus. But it’s also likely that the traditional price gap between old and new property will narrow somewhat and that, in turn, may generate fresh impetus for refurbishment and upgrades.
Developers may also find newly built homes, particularly in areas far from work nodes, harder to sell, possibly putting their cash flows under pressure. Industry observers are also predicting that mixed use developments such as Melrose Arch will become more prominent. Likewise the demand for offices closer to residential areas and the development of mini office blocks in residential areas will in all probability increase.
The upshot is that there is a definite surge towards ‘convenience style living’. Nowadays there are multi-purpose centers which cater to every need. So much so that in many instances one rarely has to leave an area to obtain all the essentials.
Growth, however has its limitations and the inability of municipalities to provide services such as electricity, may also impact on future development costs and buying trends. The area surrounding Hendrik Potgieter in Ruimsig for example, has essentially reached critical capacity.
Congestion has already forced many business executives to buy homes close to their places of work. This could impact on employees, making it harder to commute to their place of work, causing them to seek more conveniently situated properties of their own.
A further offshoot of this is that more and more executives are choosing to ‘semigrate’ i.e. they acquire luxury homes at the likes of Hartbeespoort or the Vaal Dam and then commute two or three times a week to work. The rest of the time, business is conducted via the virtual office. Suffice to say it will be interesting to see how Johannesburg’s property patterns play out in response to the city’s growth over the next few years.