Soweto property boom
Gain insight into Soweto and how values have doubled, but it is still a first-time buyers’ bonanza.
Soweto is one of the most dynamic property markets in the country. It is a bustling neighbourhood with some 37 suburbs, which are home to over 186,000 properties, more than double compared to 1994, according to Lightstone data.
Property values have grown notably faster compared to the rest of Johannesburg, basically doubling over the last ten years, making property a good investment. Khosi Sibiya and Phindi Mphahlele, licensees for Seeff Soweto, say there is high demand for property, both to purchase and to rent.
Well over 2,000 property transactions worth over R1.1 billion have been recorded for Soweto over the last year. Generally, a significant 40%-plus of buyers tend to be under 35 years of age, with the majority being first-time buyers, according to Lightstone.
Soweto is a landmark in South Africa’s history and a popular tourist area. Famous landmarks include Kliptown (where the Freedom Charter was drawn up), the Hector Petersen Memorial, and Vilakazi Street, once home to the late President Nelson Mandela and Bishop Desmond Tutu, both Nobel Peace Prize winners.
According to the Seeff Property Group, Soweto is one of the most in-demand neighbourhoods for property buyers, especially first-time buyers. While the majority of properties are freestanding, Khosi and Phindi say there is growing interest in estates and sectional titles as urbanisation and densification continue.
Seeff says further that the biggest advantage remains excellent affordability despite the appreciation of property prices over the last decade. This enables people to get onto the property ladder and build wealth. On top of that, the high demand for rentals provides an incentive to invest in property for the rental market.
Soweto is today a bustling economy, offering an excellent quality of life for residents. Affordability and family ties are often reasons why people continue buying here, but it is now also a modern neighbourhood with public and private schools, shopping malls and just about any service and amenity that you could want. It offers excellent accessibility to the Western Bypass and arterials, the universities (UJ and Wits) and hospitals and good public transportation (Rea Vaya, Putco, trains and taxis).
You can get great value in Soweto and certainly find more square meters for your money compared to many other areas, say Khosi and Phindi. Many young people are taking the opportunity to get onto the property ladder, given that a significant majority of transactions fall below R750,000 and almost all fall below R1.5 million. Only ten transactions have been registered above R3 million.
The more exclusive areas include Diepkloof, with an average price of R2 million; Dobsonville, at R1.5 million; and Pimville, at R1 million. The affordability is well illustrated by the fact that you can purchase a four-bedroom home with a garage and three flatlets in Dobsonville for R1.4 million.
A top-end property in Diepkloof with three bedrooms and two garages is priced at R1.649 million. Property taxes tend to be lower compared to other Johannesburg areas. If you buy below R1.1 million, there is the added benefit of no transfer duty. First-time buyers can also qualify for financial assistance through the FLISP scheme.
Writer: Gina Meintjes
