When Finance Minister Nhlanhla Nene announced during the Budget this year that he had decided to raise the transfer duty threshold from R600 000 to R750 000, he opened the door to home ownership for many more first-time buyers around SA.
“The change means that homebuyers now don’t have to pay any transfer duty on pre-owned properties priced at R750 000 or less – and that represents a substantial saving for first-time buyers, who generally need to have enough cash to cover a deposit of at least 10% of the purchase price as well as bond registration and legal costs,” says Tony Clarke, Managing Director of the Rawson Property Group.
“At the previous threshold, they would have had to pay 3% of the value of the property between 600 000 and R1m – or R4500 worth of transfer duty on a property priced at R750 000. Now the 3% only kicks in at R750 000 and goes all the way to R1,25m,” he says.
“But even more importantly, the change has expanded the horizons of first-time buyers and empowered them to look for homes in many suburbs where they previously felt shut out of the market because of their R600 000 limit. And this is obviously also a positive development for home sellers in these areas and ultimately, for the market as a whole.”
In Gauteng, says Clarke, the list of new possibilities for first-time buyers who find themselves in this improved position is long, but for those who would like to live within easy reach of the Johannesburg CBD in order to cut commuting time and costs, the following are the Rawson Property Group’s top recommendations:
Ridgeway, Winchester Hills and Suideroord to the South of the Johannesburg CBD.
These areas have the advantage of being within easy reach of the city via the highway or public transport and offering all the amenities of well-established suburbs – many good public and private schools and a choice of shopping centres (The Glen, Winchester Green), entertainment venues, sports facilities, hospitals and clinics.
They also offer a range of property types and prices to suit buyers of many different ages and stages of life, including apartments and townhouses for working singles and young couples and bigger homes for those with growing families.
Properties currently on the market in these areas include one bedroom, one bathroom flats at prices from just under R400 000; two bedroom, one bathroom units at prices from R460 000; and three bedroom apartments and freestanding simplexes at prices from just under R500 000. For R750 000 buyers can expect a three bedroom, two bathroom simplex in a secure complex or a two bedroom, two bathroom apartment with spectacular views.
What is more, figures from property data company Lightstone show that the majority of current buyers in these areas are aged between 18 and 35, so first-timers are likely to find themselves in good company.
In Ridgeway 48% of buyers in the past year fell into the 18 to 35 age group, which typically represent first-time buyers, while the biggest group of sellers (38%) were in the 36 to 50 age-group, which indicates a healthy amount of upgrading enabled by the strong first-time interest. There were 130 sales registered in the area in the past 12 months, at an average price of R792 000.
In Winchester Hills, 66% of buyers in the past year were under 35, and the biggest group of sellers (49%) were aged between 36 and 50. More than 161 sales were registered at an average price of R801 000.
In Suideroord, 51% of buyers were under 35 and 49% of sellers were aged between 36 and 50. The average price of all properties sold in the area was R960 000, while the average price of sectional title units was R772 000.
Auckland Park and Westdene to the West of the Johannesburg CBD.
While Braamfontein has become decidedly trendy in recent times, its housing stock now consists mostly of studio and one bedroom apartments aimed at students, so Auckland Park is a better bet for first-time buyers looking for something a bit bigger and perhaps a bit quieter.
The area offers two bedroom apartments in the R650 000 to R770 000 price range and it is close to the University of Johannesburg as well as Wits, the SABC, the Milpark Hospital, Media Park and the Richmond and Parktown business areas.
And for those who decide to settle and stay on in this great location as their families grow, Auckland Park also offers good schools, convenient shopping and “character” family homes at prices from around R1,5m.
Further to the west, the more traditional suburb of Westdene offers two and three-bedroom apartments at prices from around the R600 000 mark, and older two and three bedroom, one bathroom homes at prices starting from around R720 000. What is more, top-end prices in this suburb range all the way up to around R1,85m now, so there is plenty of margin for additions and alterations without overcapitalisation.
There are also good public and private schools in the area, and the giant Cresta shopping centre is within easy reach.
According to Lightstone, 48% of recent buyers here were between the ages of 18 and 35, and 39% of sellers were aged 36 to 50. The average price paid for a sectional title home in Westdene in the past 12 months is R571 000.
Kensington to the East of the Johannesburg CBD, which has long been popular among artists, academics and business people who commute to the city for work.
It offers a good combination of convenience and access to all the amenities and facilities of a long-established suburb – shops, public transport, entertainment venues and sports facilities.
Kensington is also close to OR Tambo International airport, a long list of excellent and sought-after schools, and to the highway network for the benefit of those who have to commute to work elsewhere in the metro.
Properties currently on the market in this area include spacious one bedroom flats in well-managed buildings at prices from around R500 000 and two bedroom, one bathroom options, some with great city views, from around R650 000 up to about R750 000. Three and four bedroom houses are available in the R700 000 to R800 000 range, although generally these would need updating and upgrading.
For further information contact the Rawson Property Group on (021) 658 7100
