Private Property: Soweto Neighbourhood

Private Property: Soweto Neighbourhood

Private Property South Africa
Private Property Reporter

Reporter: The urban area of Soweto is located in Johannesburg, and borders on the mining belt of the south, meaning South Western Township. Why is Soweto a great neighbourhood to think of putting down roots?

Simon Bray: Community is a really, really big thing there. You just have to walk the streets of Soweto and you get this real feeling of the vibe, and the people. There's an energy there that maybe you don't get in some of the other areas, some of the other neighbourhoods in South Africa. I've heard it said that one in four Joburger's actually live in Soweto. So it's just an incredibly vibrant, rich area, and I think it can add a lot to the property market as well.

Talking about the property market, what are we looking at?

Soweto and affordable markets in general (because that's what we would classify Soweto as emerging, an affordable market) - this year was actually the first year that the growth rates of those markets superceded the growth rate of the traditional suburbs, the traditional residential areas in South Africa. So it's great to see that the affordable housing market and areas like Soweto are starting to really kick; there's a real energy behind the property market there and you're starting to see values increase. I think there are a number of reasons for that, a lot more people are getting into the market, a lot more first time buyers. The affordability of that market is unreal compared to other areas in South Africa. To give you an idea, a three-bedroom house in Soweto is under R600,000 still. So there's a real great opportunity to go and get your piece of South Africa.

You mentioned one in four Joburger's potentially living in Soweto, but what type of person am I going to find fitting in there?

Well, one in four, that's a huge subset of Joburger's. You've got young professionals, you've got people working in the city in particular because the arterial roots between Soweto and the centre of the city are really good, so it is actually quite a convenient commute for a lot of people going in and out of the city every day. Great opportunity for people in the buy-to-let market as well - and I think that's interesting. When you look at Soweto, the fact that you can pick up a house for the price that you can and place tenants in that house - you're seeing a lot of three bedroom homes that have maybe two or three tenants letting parts or rooms in the house - so it's a great value option for buy-to-let investors.

When it comes to buying or renting, it seems to be really affordable, but what should you choose? What are the options?

It's a really big market and there are lots of opportunities, and what you often find in a market is a large number of people renting as opposed to buying. I think Soweto's the type of market though, that if you can afford to, you should be buying; you shouldn't be renting. The rentals are very close to the cost of ownership in that particular neighbourhood, so it makes sense to go out there, find a home that suits you, get a bond, and get involved in the property market.

It's got a rich culture, amazing landmarks. Is this an ever-growing neighbourhoods?

It certainly is. Soweto's an intrinsic part of the fabric and the history of this country and I think that charm and that character is something that really comes through in the people that live there. I think it can sometimes get overlooked in the traditional property market sense, but we definitely need to shine the light on areas like Soweto and the growth that's happening in those areas, because there's a very exciting story to tell there.

Can we have a Simon Bray tip of the day?

My tip of the day would be in these affordable markets, buy-to-let investments are really exciting. So if you're in the market as a property investor, you like to buy and want to increase your portfolio, well then you have to look at Soweto as an option.

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