This property in the suburb of Panorama in Bethlehem was recently sold by RealNet to a cash buyer for R1,37m within a week of being listed. It has four bedrooms, two bathrooms, three living rooms and a double garage.
A wave of new residents and a strong contingent of cash buyers are boosting the residential property market in Bethlehem in the eastern Free State.
Job opportunities in enterprises serving the strong agricultural sector as well as in new retail enterprises such as the new local shopping mall, currently in phase two of development, have drawn many new residents, says Marna Erasmus of the local RealNet franchise.
And brisk home sales in the town contributed to the franchise being named recently as the top performing boutique franchise in RealNet’s northern region. A total of 22 homes priced between R640 000 and R1,46m as well as four commercial properties priced between R2,5m and R3,75m were sold during the year. The franchise also sold several stands and homes in nearby Paul Roux, where prices are still very affordable.
“Roughly 30% of buyers this year were newcomers to the town employed in agriculture or related support industries,” Erasmus says. “They typically earn good basic salaries that enable them to qualify for bonds – sometimes up to 100% of the purchase price – and they typically target comfortable family homes priced at up to R1,3m.”
She says the agricultural sector is a main player in the town’s economy and farmers are currently also active buyers of second homes in the town. The reason is that boarding facilities at the excellent local schools are insufficient and farmers club together with friends and neighbours to buy houses where their wives and children stay during the week.
“This allows children to fully participate in extramural activities during the week with the minimum disruption, and families to be re-united at weekends.Many farmers are well-established and tend to buy for cash, and this has contributed to our strong cash market, which climbed to nearly 40% in the past year.”
Erasmus adds that in cases where bank finance was required, the franchise achieved a 99% success rate in obtaining bonds. “We pre-qualify our buyers in order not to waste sellers’ time and our very efficient bond originator is able to indicate with high accuracy what size bond each applicant is likely to qualify for.”
The strong demand for homes has, however, put pressure on rental stock, and this has led to rental escalations. Modest older homes in areas such as Môrelig currently achieve monthly rentals of between R5000 and R5500, while larger homes with four bedrooms and two bathrooms achieve rentals of between R7500 and R8000. Modern homes with upmarket finishes are rented out at up to R10 000/ month.
“We expect the upward curve in prices to continue next year (2015), since demand for rental units as well as properties for sale far outstrips supply. We further expect that the price segment from R640 000 to R1,5m will remain robust since banks are still granting 100% bonds to qualified buyers in this price category.”