When comparing housing options, it is possible to rent a home with greater floorspace within your price range, than to purchase a home.
A home loan on a R1 million property amounts to R9 000 per month. In SA’s major metros, it can be challenging to find a spacious home for below R1 million. RE/MAX of Southern Africa’s latest housing report reveals that the nationwide average price of freehold homes is R1,422,901 and R1,049,437 for sectional titles. “This makes renting possibly a more appealing option for those who have less than R9 000 per month to spend on housing”, says Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett.
According to Nadia Aucamp, Broker/Manager of RE/MAX All Stars, buyers will be lucky to find a freestanding home in Alberton for R1 million, but they can definitely find a two- or three-bedroom townhouse of approximately 100m2. “The units might have a small garden, although the bigger two-bedroom units will be on the first-floor complex”.
On the rental side, she says that you will be able to rent a slightly bigger 120m2 townhouse or a small home for roughly R9 000 per month. “The houses will be in Mayberry Park, Brackendowns or General Alberts Park area, usually offering three bedrooms and one bathroom with one living area. If you are looking in a complex, you might find a modern two-bedroom unit in Meyersdal or New Redruth with one bathroom and a possible garden.”
In Germiston, buyers can find a house for R1 million in Elsburg or Tedstoneville. “These houses will offer three bedrooms with one bathroom and one living area. When looking at the rental side, you could find a similar house in Elsburg, Testoneville and Mimosa Park for R9 000 per month.”
For R1 million, she adds that buyers could also have the option of buying a modern townhouse inside the Stone Arch Complex with three bedrooms and two bathrooms or a two-bedroom, two-bathroom unit on the ground floor. “The rentals for these units will be slightly cheaper than your monthly repayment. Rentals available in smaller complexes will offer three bedrooms and two bathrooms but these will not be as modern as in the Stone Arch Complex.”
Chahid Haigh, Broker/Owner of RE/MAX Elite explains rentals in the Southern Suburbs of Cape Town: “R9 000 will afford the home seeker an average home with two to three bedrooms, a garage on an average sized plot of about 500m2, situated usually north of the M5 (basically Ottery and surrounds). Further South, towards False Bay, one may find a starter home with two bedrooms on a small plot with parking for one or two cars or a two-bedroom apartment with 1 open parking bay.”
He adds that the homes in these areas sell from R1.5 million and up. “One could find an apartment for close to R1 million, but it will be a small, modern apartment without a garden, open parking for one vehicle and not much else.”
“The distinct difference between buying for R9 000 and renting for the same amount is that R9 000 per month on a bond equates to probably another R2 500 per month on rates and utilities. An expenditure of R9 000 per month in total will drop the buying power down to a bond of approximately R680 000 and there is hardly anything available in the Southern Suburbs for that amount, except for the Cape Flats.”
However, Haigh mentions that rental properties in the R9 000 price range are usually let within a day or before it gets to market on account of the waiting list of good prospective tenants. “Tenants experience huge frustration because of this type of demand. The sooner a tenant can move into the buying space, the better because house prices are moving rapidly out of the affordability range for most, and is further exacerbated by the ever-increasing interest rates.”
