According to FNB Home Loans the local property boom is spreading through to townships.
Economists estimate that average house prices in South Africa’s R200-billion a year market have raised by 229 percent in the past six years.
And although prices in townships have risen less sharply because of concerns over crime and buyer reluctance, house prices are now catching up.
â€œIn the last two years a property you could get for R250 000 is now selling for around R400 000,” Emma Ledwaba of Acutts, an estate agent operating in Thembisa Township, told Reuters.
Real estate professionals in the townships were more buoyant than their counterparts in the Johannesburg suburbs, expecting an increase in activity in the first quarter of 2006 compared with expected stability in the rest of the market.
Driving this property boom is the fact that many more developments are being built in these areas.
“It’s encouraging that we do not only get shopping centres but the whole infrastructure for communities including facilities like schools, and that will encourage residential developments,” Ed Grondel, CEO of FNB Home Loans, to Reuters.