Most people dream about living at an exclusive address in one of South Africa’s most sought after suburbs. While property experts will often advise that the most important consideration when buying a property is the location, prospective buyers should get ready to cough up for a property in an affluent suburb. There is usually some premium involved when buying a house for sale in these areas.
While the location of a house for sale is often the factor that determine price, it is not the only factor. Properties in exclusive suburbs also tend to be bigger with more rooms, space and trimmings. And while it might be necessary to try and keep up with the Joneses, property owners should never underestimate how the value of the neighbour’s house might influence the price of their house. While the value of a house for sale is determined in rand there are often some subtle non-monetary factors at play.
Recent media reports suggest that the president of the ANC youth league Julius Malema bought his house in Sandown, Johannesburg, for R3.6 million. Numerous pictures of the property were published and the story received a lot of coverage as Malema claimed that he has never seen a million rand, but was allegedly able to pay a deposit of more than R1 million on the house. If this house had to be sold today, what would it be worth? The house was bought in 2009 and economic indicators suggest that it should be worth more than R3.6 million. While the location and appearance of the house will certainly have an influence, the media coverage the story received could also have some bearing on future proceeds.
In the end it will probably depend on the future owners – would they mind living in a house that the controversial youth league leader had once owned? If they are into sushi parties, they will probably be most willing to pay much more…