Reasons To Invest In Johannesburg Inner City
Category Advice
In property circles everyone talks about location, location, location.
Location with demand is the ultimate necessity.
With an estimated one million people commuting to work in the Johannesburg CBD each day, these properties represent not just a gap in the property market, but rather a yawning chasm.
The Inner City projects have been, and are, continually extremely successful in servicing the demand for tenants and city living residents, and have shown tremendous capital growth. In 2001 you could have purchased an Inner City apartment for as little as R28 410, Ten years later, it is difficult to find well managed and maintained Inner City apartments under R250 000.
Capital growth is the silent wealth creator for many investors. The capital growth driven by demand and the demand driving prices.
Why has the demand been so strong and what would continue the momentum?
- Urban renewal projects are developed around the central master plan of a city which creates a wonderful solution for employers. Residents can work, live and play in one area without the hassle and cost associated with transport and traffic.
- Young professionals are showing a preference to live where they work.
- There is an increasing swing to downsize due to rising property prices and cost of rates/taxes/maintenance.
- These young professionals tend to meet friends and entertain in restaurants rather than at home.
- Young people are leaving home and purchasing their own apartments at an earlier age.
- With a lack of student accommodation at the various universities and technology campus', students need to rent self-catering apartments.
- Johannesburg CBD is home to many large corporate and head-offices, employing large numbers.
- As housing affordability is reducing year by year, buyers are forced to purchase or rent smaller properties to match their disposable income.
- With building and labour cost inflation increasing, the price of property will continue to rise.
- Situated close to major transport nodes, Johannesburg CBD allows the freedom and cost-save associated with transport.
- The Johannesburg Inner City area swells to over 1 million people each weekday, and more and more people are looking to rent in the inner city area, rather than having to commute to it.
- 10% of the entire population of Gauteng commute to the inner city daily.
- Due to all of the above and the clear burgeoning and almost insatiable tenant demand, savvy investors are attracted to the Inner City properties as they know the greatest commodity in the residential buy-to-let market is a good tenant and an ongoing supply of more tenants.
Jo'burg by numbers:
- Johannesburg is one of the youngest major cities in the world. It was founded in 1886.
- In the space of a century, the city has been rebuilt four times: First it was a tented camp, then a town of tin shanties, then of four-storey Edwardian brick buildings, and now a city of modern skyscrapers.
- Johannesburg houses the tallest office block in Africa, the Carlton Centre (50 storeys) and the tallest tower, the Hillbrow Tower (90 storeys).
- Johannesburg is nicknamed "Egoli", which means "place of gold". Forty percent of the world's gold has been found in the Witwatersrand, the reef on which the city was built.
- Population of Gauteng is 10.53 million
- Population under the age of 15 = 2.78 million
- Population aged between 20 and 65 = 6.43 million
- World-class City and financial centre of South Africa
Employment by sector:
- Financial and business services: 22%
- Manufacturing: 20%
- Trade: 19%
- Community and social services: 18%
- Construction: 8%
- Transport and communications: 6%
- Public administration: 5%
Inner City Facts and figures:
- Floor space: 7 million m²
- Office space: 3-million m²
- The equivalent of 57% of available space in Durban, Cape Town & Pretoria combined
- Home to a large number of corporate head offices
- Number of people currently living in Johannesburg CBD is estimated at 250 000
- 100's of new restaurants, from quirky coffee shops to fine dining
- Accommodating business and tourism with hotels and accommodation from budget to 5 star; hotels, resorts, inns, boutique hotels, guest houses and B & B's
Inner city vision
The executive mayor, Amos Masondo - "the vision of the inner city is that of a dynamic city that works; a liveable, safe, well-managed and welcoming city; people-centred, accessible and celebrating cultural diversity; a vibrant 24-hour city; a city for residents, workers, tourists, entrepreneurs and learners focused on the 21st Century; respecting its heritage and capitalising on its position in South Africa, Africa and the whole world; a truly global city, the trading hub of Africa, thriving through participation, partnerships and the spirit of Ubuntu".
Inner City has distinctive competitive advantages:
- Pivotal location in the city's centre
- Major public transportation hub: all major arterials, all rail, and all bus services run into the city centre
- Access to a large workforce also due to easy access from Soweto
- Under-served markets
- Significant infrastructure
As it becomes increasingly more difficult to buy property, an entry level investment with a high tenant demand can certainly create true wealth for you. Property is not a get-rich-quick investment, but when you look back after a few years, it will undeniably have been worth it.
Author: Imagine Property
