SA township property market gets youthful boost

The demand for affordable housing in South Africa’s traditional township areas is driving the township property market boom.

According to data, it has recently been found that first-time buyers are snapping up township homes, with 65% of registered bonds falling within the R750,000 price range.

This surge in demand is a significant shift towards affordable housing options, indicating a growing need for access to affordable housing.

Trendy areas in Gauteng

“Less than 14% of BetterBond’s registered bonds in township areas between January and May this year were above R1 million, and only one was more than R2 million,” said interim Chief Executive Officer of BetterBond, Bradd Bendall.

This data suggests that the majority of buyers in these areas are price-sensitive and seeking affordable options.

Over the past six months, some of Gauteng’s most sought-after township regions include Protea Glen, Soshanguve, Ivory Park, Tembisa, Daveyton in Ekurhuleni and Sebokeng.

ALSO READ: Funeral insurance tops complaints to ombudsman for long-term insurance

“Protea Glen has become one of the more sought-after township areas because of its affordability and ideal location close to shopping centres, schools, and public transport routes. It is popular with first-time buyers and young families,” Bendall explains.

These areas offer value for money, with homes available for between R650,000 and R750,000.

In Protea Glen, for example, a well-sized two-bedroom home can be purchased for R650,000. While in Soshanguve, you need only add R40 000 to purchase a similar home.

These prices are significantly lower than in more affluent areas, making them an attractive option for first-time buyers and young families.

ALSO READ: Time to go for gold: 3 ways to save like an Olympian

Western Cape township property market

Furthermore, while properties in the Western Cape were slightly more expensive it was only by a couple of thousands. The three most thriving regions are Athlone, Gugulethu and Mitchell’s Plain.

However, Gugulethu had the most affordable houses in the past six months. Two bonds registered there in the past six months for R200 000 and R500 000. This particular area appealed mostly to the youth under the age of 25, according to Bendall.

Additionally, Mitchell’s Plain almost hit a R1 million sale, with a bond going for R900 000. “BetterBond registered a bond for just R150 000, the lowest during this period, in this area,” notes Bendall.

This while Athlone succeeded in hitting the million rand mark and doubling it, registering a bond from R2 million.

ALSO READ: Economic Wrap: Manufacturing performs poorly, MPC set to meet  

“Athlone is one of the suburbs offering affordable housing to have shown impressive price appreciation in recent years. Two of the four bonds registered by BetterBond were above R1.7 million, attesting to the growing demand for property in the area.

“According to Property24, the average sales price in Athlone in 2023 was R1.6 million, more than double the R750 000 it was a decade ago,” Bendall shared.

Demographics: Who is buying?

While the township market is attracting buyers of all ages, the majority are between 30 and 39 years old.

“Our application data for township properties shows that these areas appeal to a range of buyers – particularly those between the ages of 30 and 39, who account for 52% of all applicants,” Bendall notes.

Demographics above this age opted for more concentrated areas according to Bendall.

ALSO READ: 1.9 million people qualify for car financing but do not use it

He said “mature” buyers viewed Protea Glen, Soshanguve and Mitchell’s Plain for buying property.

“We noted the oldest bond application, at 62, was for a property in Soshanguve. Younger buyers up to the age of 25 opted for homes in Kagiso, Protea Glen, Soshanguve and Gugulethu.”