South Africa has entered into a buyer’s market and the international community, especially, is benefiting from the favourable exchange rates.
South Africa has entered into a buyer’s market and the international community, especially, is benefiting from the favourable exchange rates. Property in the larger cities, particularly Cape Town and surrounding areas, are being snapped up by foreign investors, and wide areas of land throughout the country are being turned into sprawling housing complexes, or worse still (yet another) giant shopping mall.
South Africans are also investing in property, though high levels of unemployment and salary increases that are not commensurate with increased interest rates make it that much tougher for the average South African to secure a bond in their own country.
Distress sales account for a significant percentage of property sales, due to high financial pressures on home owners to maintain bond repayments. As such, South Africans who are able to purchase property may find themselves falling victim to a vicious cycle, with actual property profit margins not as high as perhaps projected.
Given national trends, Grahamstown sits in an intriguing position. At first glance, it would appear that the property market in Grahamstown is booming. New housing complexes are being built, Rhodes has recently opened new residences, and the demand for housing appears to far outweigh availability.
More and more students arrive each year expecting to be accommodated, and while this is good news for local property owners, the reality is that the student influx has pushed property prices as well as rentals beyond the grasp of the average Grahamstown citizen.
Perhaps a solution is to invest more into developing resources in the township, improving sanitation and access to basic amenities, and enhancing the infrastructure and quality of the houses themselves. Already there has been growth in the BB industry in the township, though admittedly the low business turnover in this relatively new enterprise during this year’s Festival pointed to a missed marketing opportunity.
Of course other issues such as transport to and from Joza and Fingo Village for students and home owners would have to be addressed. But we must remember that the township is not a separate entity from Grahamstown but rather an extension of this city.
Should the municipality successfully improve the quality of housing and amenities in the township then property investors, the local hospitality industry, students and township residents will all benefit. Grahamstown’s economy will grow and property prices might start to reflect a more traditional growth trend.