Township property booms

Zweli Mokgata

Zweli Mokgata

Township properties are looking ever more tempting for buyers and investors as credit restrictions put the squeeze on buying power.

Since the implementation of the National Credit Act last year, property prices have experienced a significant slow-down.

But demand for reasonably-priced quality housing has boosted demand for township homes, according to FNB's third quarter township property barometer released yesterday.

FNB property strategist, John Loos, says: "While the township market is also slowing there is much higher demand than in suburban areas.

"Stock shortages and high demand is contributing to high property inflation in townships, whereas inflation in suburbs was virtually non-existent," he says.

According to Loos housing inflation for the third quarter of this year compared to last year was 19,7percent in townships compared to 1,1percent in formerly white suburbs.

Burgeoning retail centres such as the Maponya Mall, close-knit communities and affordable rates appear to be more than a worthwhile trade-off for the lengthy commute into town.

According to Definite Shelter property agent Eric Gumbi: "In suburbs, the more space you take up the more you pay in rates and taxes. In the township, however, you pay a fixed rate which is more reasonable."

But Proplist real estate consultant Tebogo Sebilwane cautions that potential home owners need to be educated about debt management.