Agents usually advise buyers to look for the worst property in the best neighbourhood - after all, location, location, location is the tried and tested estate agent’s mantra.
However, many areas that were previously considered undesirable have transformed themselves in the past few years, and home owners in these neighbourhoods are reaping the benefits of buying while prices were relatively low.
Examples include Woodstock, Observatory, Walmer Estate and Rondebosch East in Cape Town. These previously rundown suburbs have experienced a new lease on life in the past fifteen years, as buyers have discovered their many advantages. Woodstock and Observatory have become popular with creative young people, and in addition to older homes being snapped up and restored, many developers have climbed on the creative bandwagon to convert derelict warehouses into trendy craft spaces and apartments.
Walmer Estate, with its magnificent views over the city and harbour, has become an elite suburb, and in Rondebosch East scores of previously modest homes are being transformed into upmarket residences.
Other cities and towns around the country that have become increasingly desirable in the past ten years include those within a 40km radius of OR Tambo International Airport on the East Rand. In several towns making up the City of Ekurhuleni, for instance, many previously neglected suburbs have almost overnight become popular among buyers who see the benefits of living close to the new aerotropolis.
In 2017 the City of Ekurhuleni approved the 30-year Ekurhuleni Aerotropolis Master Plan, paving the way for socio-economic impact projected at R8.1 billion a year. The aerotropolis being created around OR Tambo International is expected to create more than 250 000 jobs, with projects using labour-intensive scenarios set to change the landscape of joblessness in the city and the rest of Gauteng.
In addition to residential property prices appreciating, many new industries are springing up in the previously dingy East Rand towns. The small town of Dunnottar, for example, is now home to the brand new railway carriage factory, Gibela Rail Transport Consortium, which currently employs around 800 people. About 100 local suppliers are providing the various components and a number of services, and at full production, the plant will employ around 1 500 people.
To keep up with the influx of new residents in the area the 50 000m2 two-level regional Springs Mall opened in nearby Springs in 2017, and has significantly changed the retail environment in the region.
In the Eastern Cape, Port Elizabeth has a lot to offer prospective property buyers looking for more affordable homes or investment properties.
The average property prices are more affordable than some of South Africa’s other metros and buyers can find some real bargains – with the potential of good returns on investment. According to Lightstone, the average price of freehold properties increased from R690 000 in 2008 to more than R1 million in 2018. Similarly, sectional title units averaged R515 000 in 2008, and have since increased to R895 000.
The demand for freehold and sectional title developments is steadily increasing in the lower price bracket, and PE is shaping up to be the lifestyle leader of the Eastern Cape. Lorraine and Sherwood - two more affordable suburbs not far from the city centre - are now appealing to new buyers looking for value.
Sizable investments in PE – such as the Coega Industrial Development Zone (IDZ) and other areas earmarked by government for fast-tracked development – are among the major reasons property values are improving.
Officially opened in 2015 after two years of construction, the R1.7 billion Baywest Mall is designed to be the catalyst for development of the greater Baywest City precinct. The R6 billion city development is planned to consist of residential, commercial, lifestyle and community developments unfolding over the next decade.
Other large scale investments in the area include the R7 billion Westbrook mixed use development by Amdec, which is transforming a formerly derelict and isolated 128ha pocket of the city on a main arterial route north of the Old Cape Road, 12km west of the CBD and close to Baywest Mall. All around South Africa Cinderella-style neighbourhoods like these are making the transformation to good value areas that are well worth investigating.