Property reporters tend to focus on South Africa’s major cities where a steady influx of new residents often causes prices to appreciate. Occasionally, however, highly satisfactory property conditions and sales are achieved in outlying areas, even though trend analysts tend to remain unaware of these.
One such precinct, say Frik Butler and Leonette Koekemoer, franchisees for the Rawson Property Group’s Potchefstroom franchise, is the town where they operate. Here, they say, prices have been stable for at least three years and they have predicted that an overall 6% price rise could be achieved this year.
Butler and Koekemoer bought the Rawson franchise in September last year and as a result of the favorable conditions they have fared so well that already they employ six agents and are achieving four to five sales per month.
What are the factors driving this success?
Discussing this at the Rawson Property Group’s conference held at the Arabella Hotel and Spa in Kleinmond during February, they said that although it has its fair share of affluent and large homes priced at anything up to R6 million or even more, Potchefstroom is well endowed with a supply of affordable houses in the R500,000 to R1,2 million bracket. Demand for these kinds of homes is strong because of the large staffs employed by the local military camp, the big agricultural organizations serving the area and the employees of the North West University with its well-equipped Sports Academy.
Also stimulating demand in this area, they said, is the large student population, who are able to pay anything from R3,500 per month for a small 29 m2 bachelor unit to R5,500 for a two bedroom home or even more where five or six students can be accommodated. The Potchefstroom franchise’s rental portfolio, only just established and now with its own manager, aims to have 100 houses let within the not-too-distant future.
In the higher bracket properties, said the Rawson franchisees, demand, which tailed off noticeably in 2011 and early 2012, has been noticeably stronger in recent months and Rawson can offer a very good selection of large, dignified old Victorian and Edwardian homes as well as some avant-garde modern homes in the R2 million to R5 million price bracket.
“The overall outlook for Potchefstroom property,” said Butler and Koekemoer, “is good and those who do buy now, we predict, will find that they have acquired a sound, steadily appreciating asset which, if rented out, will give returns in the region of 6 to 9% per annum right from the outset.”
