Potchefstroom struggles with affordability

Despite Potchefstroom's municipality having approved plans to build 5 000 new cluster homes in the area, the shortage of affordable stock is likely to worsen in the face of a lack of development in the R100 000 to R300 000 price range.

And most affected are the emergent market buyers and students unable to secure hostel accommodation at Potchefstroom University, says Martin Coetsee, manager of Realty 1 Elk Potchefstroom.

Exacerbating the situation was a lack of knowledge pertaining to home financing, said Coetsee, since a large number of previously disadvantaged buyers were unaware that they could secure home loans to fund their property purchases.

"The local market is very active at the moment, with the majority of our enquiries coming from emergent market buyers," he said. "They come to us with R50 000 to R80 000 in cash to buy a house because they understand the value of home ownership and want to upgrade to better areas. However, there is no stock available in that price range which means we have to educate them about the option of securing home loans. There's a huge lack of knowledge in this market that needs to be addressed."

Commenting on the shortage of student accommodation, Coetsee said that the university had recently finalised its hostel quotas for next year, with the result that unsuccessful applicants were desperately seeking alternative accommodation in the locale.

"This is normal for this time of the year and we are inundated with requests from parents for flats to rent or buy," he said. However, while there was stock in this category, the price for a bachelor flat situated close to the campus had now risen to around R300 000 which was out of the financial reach for many prospective buyers.

Buying activity in the lower and middle market sectors was steady with unusually high demand coming from clients outside the town's geographical boundaries. "In the last seven to nine months, we've noticed an increase in the number of people relocating from Johannesburg and Pretoria to Potchefstroom in pursuit of better value for money and drawn by the relatively low crime rate," he said.

"They are prepared to drive 50 to 100 kilometres to work and back in order to be able to buy a three bedroom house for between R400 000 and R700 000, prices that are now almost unheard of in the big cities."

The heat had, however, cooled in the top end of the market from overpricing, said Coetsee, and although the town had seen its share of million rand properties changing hands in the last year, demand for properties priced at R800 000 and upwards had decreased.

Ends

Back to News