Randpark Ridge, the middle class Gauteng suburb which lies just 10 km northwest of Johannesburg’s centre and is made up of approximately 1,200 sectional title, 3,150 freehold and 1,300 gated estate properties, says the Rawson Property Group’s franchisee for the area, Tim Crawford, has proved to be one of the very few residential areas in South Africa where steady, on-going price rises have taken place year after year, at least since 2004, if not earlier.
“Deeds Office figures, compiled by Lightstone, show that in 2004 the average price of a sectional title unit at Randpark Ridge was R401,000, while freehold properties, on average, were selling at R714,000. Despite sales numbers falling quite drastically after 2006, by 2013 the average price of a sectional title unit here had increased to R825,000, while freehold properties have recently been selling at R1,515,000.”
“According to Lightstone there has not been one year in which prices did not rise.”
This suburb, says Crawford, is exactly right for today’s young upwardly mobile buyers: around 44% of sales in 2013 were in the R800,000 to R1,5 million bracket and around 47% of sales in the R1,5 million to R3 million bracket. There were no sales over R3 million in that period, but about 9% of the total sales were priced below R800,000.
Prices, says Crawford, have recently been rising at a phenomenal rate — only 24 months ago, 15 to 20% of all sales would have been in the R400,000 to R800,000 bracket.
“Knowing that there are very limited opportunities for new projects to be developed here,” says Crawford, “we can confidently say that stock shortages will see to it that 8 to 10% prices rises are recorded here this year and possibly thereafter.”
Most of the current houses, adds Crawford, are “quite old”, some of them dating back to 1980, but many of today’s buyers are able to afford upgrades and these are rapidly transforming the area.
As in all Gauteng suburbs where stock is in short supply, monthly rentals are, says Crawford, rising even faster than sales prices – and, he says, demand here is exceptionally strong right now.
“We currently have around 80 houses in our rental portfolio and the sectional title units here are priced from R5,000 to R12,000 per month, while the freestanding homes can rent at anything from R8,000 to R20,000 per month. Demand is, however, so strong that we could easily rent out double the number of houses we currently have on our list.”