New study: Pretoria is the world's most affordable capital city
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Tired of scrolling through endless property listings, only to find that the prices are way out of your budget? Well, we have some great news for you! A new study by NetCredit has found that the average home in Pretoria costs $69,975 (R1,26 million) which is the most affordable when compared to the average salary in the city. Not only is it a beautiful city with great amenities, but it's also an ideal choice if you're looking to buy property without breaking the bank.
Factors behind Pretoria's pocket-friendly charm
Building on NetCredit's research, Herman Fourie, Director at Century 21 Montana/Moot, says Pretoria is an excellent option for the budget conscious. He shares the factors that have made the city affordable:
Income levels: Pretoria consists of 261 747 properties made up of low-income families (19.9%), high-income families (26.4%), the wealthy (10.5%), and the super-wealthy (1.4%). The biggest number, 41.6%, belongs to middle-class families. That is almost half of the population in Pretoria. This suggests that middle-class properties are way more in demand compared to Cape Town, for example, where 48.7% of their population belongs to the wealthy class. This is one of the reasons why Pretoria is so affordable.
Population size: Pretoria has 759 813 economically active individuals and Cape Town has only 91 213 economically active individuals. This suggests that Cape Town has 8x fewer potential buyers of properties. It also indicates that Pretoria has a lot more potential buyers thus forcing property prices lower than Cape Town. Interestingly, Pretoria has even more individuals (759 813) than Johannesburg (689 295) which is considered to be the "business hub" of South Africa and is geometrically larger than Pretoria.
Construction of property: Pretoria has been graced with an ample amount of new developments over the past decade and beyond, mostly consisting of sectional title housing e.g. flats or complex living. From an investment standpoint, this is a great opportunity for investors as the profit per square metre is much greater compared to a freestanding home. A block of flats (e.g. 30 units) will produce more profit per m2 for the same size erf the flats were built on. Investors are not shy of investing in new developments, especially those with "off-the-grid and modern " solutions e.g. solar geysers, fibre-ready internet, metered water, prepaid electricity, gas hobs, and so much more.
"Other factors include interest rates, the rate of inflation, demand and supply, and investment scale," Fourie says.
Best suburbs for budget-friendly bliss
So where are the top places to consider? Fourie says you can find good value for money in almost any part of Pretoria. However, these two suburbs are standouts for their price points.
Montana Park: North of Pretoria, this is a popular and attractive suburb for young working professionals and a growing family. The suburb is situated right next to the N1 highway, making travelling to Pretoria East and neighbouring suburbs convenient. The average property price is R1,700,000 to R2,000,000 for a 3-4 bedroom property, with a decent size erf of 1000 square metres. There is a wide variety of upmarket and secure sectional title units and estate living.
Garsfontein: This is a sought-after neighbourhood with massive demand due to its location and pleasant suburban atmosphere. The average selling price for a property is R2,200,000. There is also a conveniently located primary school and high school. Garsfontein has a family park with water slides and playgrounds for the kids to enjoy. There are also a lot of nearby shopping centres and amenities for your convenience. Garsfontein has properties available in every price bracket to fit your pocket.
How to buy an affordable home
"When you are browsing through pages and pages of property listings, it can become confusing with so many options available," says Fourie. "However, there are four key points to keep in mind when house hunting."
1. Get pre-approved: As a homeowner, you may be concerned about not being able to repay your monthly mortgage repayments. In order to gauge a homeowner's affordability risk factor, the South African National Credit Act has been regulating reckless credit behaviour by credit providers and consumers. As a homeowner, you have the responsibility to acquire the necessary pre-approval from your local real estate agency, bond originator, or bank in order to assess your affordability to avoid financial ruin later down the line.
2. Consider your budget: Most buyers are limited by their budget, which means that some neighbourhoods will automatically be ruled out as an option. A buyer will usually aim to buy in the best area possible while staying within their budget. This might mean that you should buy a smaller property in a better area than a bigger property in a less desirable area.
3. Prioritise access to amenities: Being close to schools if you have a growing family, recreational activities, and medical facilities are all factored in when choosing a neighbourhood. Travel time and costs to these amenities play a huge role in deciding which neighbourhood to choose. A property close to good amenities is also considered to be more valuable.
4. Choose safe surroundings: Safety is often a main concern when buying into a neighbourhood. There is a boom in the number of gated communities as this gives people a sense of security. Looking at a gated community is unfortunately not enough. When considering the safety of a neighbourhood, it is still important to evaluate things like police and private security presence, community involvement, the crime watch (neighbourhood watch), and the general crime statistics in the area.
If you are an investor, it is best to look into buying in a neighbourhood with a low-risk crime rate and a strong sense of community where you can picture yourself and your family comfortably.
Unlock affordable homeownership today
Fourie says professional assistance can help you conclude a successful deal on a budget-friendly home.
"While the seller is technically the estate agent's client, a good property practitioner will be able to provide all the relevant information that you might need in order to make an informed decision," he says. "Make sure that the practitioner you are dealing with has a valid Fidelity Fund Certificate issued by the Property Practitioners Regulatory Authority (PPRA). The PRRA is a statutory body that primarily exists to regulate the industry and protect consumers in their dealings with practitioners."
Century 21 Montana/Moot's certified property practitioners are ready to give you the keys to your home. View our Pretoria properties for sale to get started.
Author: Century 21 South Africa
