Kraaifontein house prices still rising fast

If three years ago a young couple had bought a two bedroom freehold house with a garage in the Kraaifontein area of Bonniebrae they would, says Rowan Alexander, Director of Alexander Swart Property, have paid somewhere between R750,000 and R800,000.

Today, he says, that same home would probably sell for ± R950,000.

That sort of price rise, says Alexander, is typical of those witnessed in most sections of Kraaifontein in recent years.

Jason Blight, Manager of Alexander Swart Property’s Kraaifontein operation, says that 13% per annum price increases have been seen in Kraaifontein for several years and he predicts that a combination of stock shortages and ongoing demand will ensure that although future price increases may not be quite so spectacular they will remain well above average in the Greater Cape Town area.

The very satisfactory value rises, says Blight, have enabled many Kraaifontein home owners to sell and upgrade to bigger and better equipped homes either in Kraaifontein or elsewhere, but Kraaifontein still is an area where ‘ordinary’ middle class home owners can manage to buy because the average price of a freehold home here in the last year was R995,000 while the sectional title units on average cost only R450,000.

A joint husband and wife income of R28,000 to R30,000 per month would, says Blight, usually qualify the buyer for a 100% bond on a R950,000 home.

In five years from now if the home is well maintained it will very likely have a sale price of R1,7 million.  In today’s money the buyer of such a home would probably have to have a joint monthly income of R51,000 to R57,000.

Kraaifontein, says Blight, has 21,200 homes, 768 in gated estates, 569 in sectional title schemes and 19,903 are freehold, free standing units on their own plots.  In the last 12 months 707 properties have been sold and of these 96 were vacant plots, quite often bought by developers who are now cashing in on the strong demand for homes in Kraaifontein.  As the current average price of an vacant plot is still only R578,000, developers can often offer buyers a complete home package for under R1,5 million, says Alexander – and such purchasers have the additional advantage of avoiding transfer fees.

With prices continuing to rise, says Alexander, today’s typical cash strapped young couple may be tempted to carry on renting and to defer becoming homeowners, but as the price escalation figures in Kraaifontein quoted above, show house price rises tend to be greater than salary increases.

This, says Alexander, means that the right time to buy is, as always, as soon as possible because three to five years down the line it will be considerably more difficult.  However if the potential buyer adopts a strict budgeting and a saving mentality now he will get onto the profitable home owning ladder, to the ultimate benefit of himself and his family.

For further information contact Rowan Alexander on 082 581 3116