Many diverse factors determine the value of residential areas - Buyers should try and identify them.
Eight out of ten of the potential home buyers who approach Alexander Swart Property for help in their search of a home at some stage fear that they are not sure how to assess the value of the areas and the properties they are considering.
Discussing this recently, Rowan Alexander, Director of Alexander Swart Property, drew attention to an analysis compiled by Foxtons, one of the longest established of the UK estate agencies covering the reasons for upturns and declines in residential property precincts. The same factors which influence British property trends apply here in South Africa, says Alexander.
As a first step, Foxtons advise prospective buyers to try and find out what the employment/unemployment rates in the areas they favour are: if employment is on the high side, the area is likely to be on the up and up and to experience further price rises. Conversely if unemployment in the area is high, house prices are likely to be less expensive but are also unlikely to escalate satisfactorily.
Areas which are close to expanding businesses and industrial precincts (such as, at the Cape, Century City, Brackenfell or Tyger Waterfront) will usually have high employment figures and a thriving residential property market. If the area has been able to attract big name businesses and companies known to be influential in the economy, this will instil confidence in the public and pull in new home buyers, causing rising house prices. By way of contrast, those areas sited a considerable distance from high employment nodes (as are many of the Cape’s outlying villages and suburbs) are likely to have a more staid property market.
The next factor to examine is the public transport service and the road infrastructure. In Cape Town areas with My Citi bus routes or close to the suburban railway line are attracting house buyers and generating rising residential house prices, as are those with easy road access to the CBD, e.g. Durbanville, Sea Point and Camps Bay.
Another factor to consider, especially here at the Cape, is the availability of water: where there are sufficient supplies, the resultant cultivation of green public spaces and private gardens will enhance the appeal of the area. Certain suburbs, by having large numbers of boreholes and efficient water storage systems, have, says Alexander, put themselves in a position to survive the summer droughts likely to become a fact of life at the Cape.
Also indicative of the ‘health’ of a residential precinct are the leisure and recreational facilities in it. If lifestyle facilities such as restaurants, coffee shops, shopping malls, gyms, bowling greens, tennis and squash courts, biking and walking trails are well established and proliferating, that is a good sign that the precinct is on the rise.
Even more important, however, says the Foxton report, is the number and standing of the schools, colleges and, possibly, universities in the area. Any district with good educational facilities (at the Cape, places like Paarl, Stellenbosch, Rondebosch and Wynberg) will have an ability to pull in buyers and keep house prices rising.
Where these and other factors are evident, said Alexander, an area will often undergo an ongoing regeneration process, even if it has been established for many years. Potential buyers should learn to spot the signs of a regeneration taking place (as, for example, has been the case in many of the affluent Atlantic Seaboard suburbs where continuous upgrading and rebuilding of older properties has taken place rapidly over the last decade).
For further information contact Rowan Alexander on cell phone number 082 581 3116 or by email rowan@asproperty.co.za.
16 Feb 2018
Author Independent Author