A ‘stepping stone’ for new buyers

CHANTEL ERFORT

When Mitchell’s Plain got under way in 1974, it was envisaged that within the following 10 years, it would be home to 250 000 people. Now, as Mitchell’s Plain marks 40 years since its establishment, Plainsman looks back at the growth of the property market over the past few years.

According to the 2011 census the area’s population is just over 310 000, while more stats quoted by estate agencies range from 290 000 to as many as 770 000 people. And while Census 2011 counted about 68 000 households, estate agents quote figures of between 60 000 and 88 000, with most properties being freestanding homes.

FNB economist John Loos noted that the property market has fared well over the past two years, particularly so in former “township” areas and more affordable neighbourhoods – and prices in Mitchell’s Plain are on the up, said Gary Grobbelaar, Seeff’s CEO for False Bay and the South Eastern Suburbs.

The total property market transactions for the past year is 2 322 sales with a combined value of R648 062 000 – an average sales price of R279 096 a property. In reality though, prices vary drastically across the area, from very affordable to middle-class, said Mr Grobbelaar.

A look back at the Plainsman’s 21st anniversary edition, published in 2000, shows that one could buy a three-bedroom home in Lentegeur for around R70 000 to R75 000. Today a similar home, in the same area would cost you between R390 000 and R450 000.

In 2000, a three-bedroom house in Rocklands would cost you around R94 000 and a four-bedroom home about R122 000 while today you’d be looking at paying closer to R349 000.

If you were in the market for a home in Portland 16 years ago, a three-bedroom home would set you back R105 000 while today you’d be forking out between R550 000 and R640 000.

A cursory look through property ads published in 2000 and those which appeared more recently, show that in Beacon Valley, Tafelsig and Eastridge property prices have remained lower than in other parts of Mitchell’s Plain.

In most areas, however, the average prices have strengthened over the past 10 years, especially in the five years since 2010, said Mr Grobbelaar, although he cautioned that he expected growth to stall in view of the poor economic outlook for this year. “Where the average price of a house at the lower end of the market was R85 000 in 2005, it is now R230 000, almost 270 percent more and up by 130 percent in the five years since 2010,” said Mr Grobbelaar.

“At the top end of the scale, the average price is up from R254 000 to R680 000 which also translates to about 270 percent growth over 10 years and about 150 percent up since 2010.”

Adrian Goslett, regional director and CEO of Remax of Southern Africa explained that home prices in the area saw excellent growth from 2005 to 2008, dipping off slightly in 2009, with property prices recovering in 2010, showing further growth the following year. Property prices in the area once again slowed in 2012 and 2013, but recovered in 2014 and have shown steady year-on-year growth since. He noted that the average freestanding home price is currently at a record high of R315 000 and that an average of 1 894 homes are sold in Mitchell’s Plain each year.

Louise Joemat, Seeff’s sales supervisor for the area, said while the area is faced with significant socio-economic challenges, especially in certain areas, it can be a stepping-stone area for lower income first-time buyers.

“You can, for example still find an older basic cottage with up to three bedrooms for about R300 000 to R400 000 and there are plenty of bigger houses that are a bit older with nice garden space for around the R600 000 to R800 00 mark,” she noted.

“Bigger houses, especially in the better areas can go for as much as R900 000 to R1.5 million on average, but can range to about R2.2 million for a spacious four-bedroomed home with modern finishes along with a double garage and swimming pool. There are plenty of new developments with prices starting from around R400 000.”

According to Lightstone statistics, the area has proved to be highly popular with consumers under the age of 50 years old. Around 38 percent of recent buyers were between the ages of 18 and 35 years old and 34 percent were between the ages of 36 and 49 years old.

Thirty-six- to 49-year-olds also accounted for the highest percentage of recent sellers, while the highest percentage of existing homeowners in the area is made up of consumers between the ages of 50 and 64 years old. It is interesting to note that 65% of homeowners in the area have lived in the current property for 11 years or longer.

Strandfontein has remained one of the more sought after areas in Mitchell’s Plain, with two-bedroom homes in Bayview going for R134 000, 16 years ago, and around R350 000 in Strandfontein Village these days. Two years ago agents were seeing a lift in the market, with RealNet Select’s Astrid Smith-De Gruchy pointing out at the time that “(Strandfontein’s) compact two-bedroom homes on small and manageable stands are particularly popular among young entrants to the market.”

At the time she had also noted that Strandfontein was also popular among buyers upgrading from other parts of Mitchell’s Plain. “Buyers who are upgrading usually target homes in the top segment of the Strandfontein market, “ she said.

At the time prices for such properties started at around R650 000, with those which had been upgraded, reaching prices of up to R900 000. Adverts in recent editions of the Plainsman show that these prices have remained stable, with three-bedroom homes in San Remo being advertised for R690 000, a two-bedroom home in Bayview for R650 000 and a four-bedroom property in Old Strandfontein on the market for R875 000.