Factors That Influence Your Property Value
Location
Properties that are located within suburban areas tend to be more valuable per square meter when compared to properties in and around townships. The location of the property is subject to a different municipality which at times could mean A different level of service; it’s common that communities in suburbs tend to get fast or reliable services compared to communities in the townships, such as sewerage, electricity, water, street lights, emergency services. The experience is that suburbans down time tends to be a lot less.
Easy access to public transport, people in the suburbs have more access to public transport than people in the townships, such as the GauTrain and buses, which doesn’t have a station in any township, the availability of learning institutions also tends to affect the value of the property such as schools, colleges and Universities. Suburban properties will most likely have have better views, better planned orientation. Within Suburbs the are still various classifications which will contribute to how valuable a property is this classifications may be based on safety, easy access to shopping, and major road arterial networks for easy mobility.
If we take Steyn City in Midrand as an example, property in Steyn City offer very high value per square meterage. Some of the features include an equestrian lifestyle with 810 ha of unfettered horse riding terrain, a designer golf course, modern health facilities and Modern shopping centers, Business Parks, City of Johannesburg, City of Tshwane, Sandton as well as the Airport.
Size
The size of the house in terms of space per square meter influence the value of the property. Bedrooms, bathrooms and garages are natural influencers of value. Have an outdoor entertainment area, built-in braai and you have yourself a winner. If you have more space you could also have a home office/Studio/workshop.
As for the number of rooms a home offers; more is better to a certain point. Very few buyers are looking for more than four bedrooms, and two or three bathrooms is usually adequate for everything but premium properties. Having more than this might appeal to some buyers, but won’t necessarily add proportional value to your home's value per square meter. The actual size of each room is also important so as not to cramp occupants into small spaces. There is however, a growing theme of minimization which speaks to decreasing availability of land and the need to optimization in design.
Age
Open-plan living,specifically dining rooms and entertainment areas, have become the norm. Older homes with separate enclosed kitchens don’t do too well when it’s time to sell. How long the structure has been in existence normally speaks to higher maintenance costs. The newer the home, the higher the value per square meter.
Technology
Technology affects all aspects of our lives, and our properties are far from exempt from this trend.
Having a tech-friendly home is becoming more and more important and simple things like built in charger points and thoughtful power outlet positioning can certainly increase the desirability – and value – of your home. Home automation tools, particularly for security systems, are also very popular, as are Eco-friendly value-add ons like solar heating or independent power generation and grey-water recycling system. Technology allows us to be efficient by decreasing costs overtime, creating value.
Building Regulations / Future Plans
New constructions and major renovations require building permits which needs to go through process of approving building plans which will inform the proposed area coverage, shape, size and design aspect. There are technical considerations to take into account which would look at safety and the proposed construction process. The process of A new construction may take some time to realize due to the necessary approvals that are required and the need for bulk infrastructure to be in place. Some areas already have these in place and the process of construction approval may be expedited, whereas areas that do not have these in place will suffer long delays. The reason for building regulation is to preserve value and future safety of inhabitants. If an area is well planned it will have spaces like parks, schools, health facilities, and shopping (even work spaces) all in good proximity; this will create a harmonious living environment contributing to value.
If we continue with our example of Steyn City, building regulations imposed in terms of stand coverage; with maximum coverage [building footprint] permitted for all roofed structures being 50% of the area of the Erf. Exterior hard landscaping surfaces (i.e. tiling, bricks, concrete and gravel) are not to be more than 35% of the total stand, at least 65% of the total area of the stand has to be covered with soft landscaping and no more than 50% of the total soft landscaping area will be covered with lawn. This are some of regulations that have been put in place at Steyn City to create an environment that optimizes on the natural foliage and not have a false concrete or turf. We believe these contribute to the current appeal of Steyn City and preserve the future value of properties. Environmental regulation is becoming more important with sustainability considerations, and the impact of construction on the environment becoming very important considerations.
Interest Rate
This is a key to how mortgage rates are established because interest rates set the cost for banks to borrow money. Lower SARB (Reserve Bank) interest rates typically lead to lower mortgage rate offers from banks; this, in turn, decreases the monthly mortgage payments a home-buyer must pay for a given mortgage amount. The smaller the monthly payment, the more affordable a loan is to prospective home-buyers; this fact can increase the size of the mortgage for which home-buyers are eligible to get which, in turn, might drive up property value per square meter.
Politics
Politics may influence values through rhetoric, and policy. These may directly impact value through as rising inflation. Inflation erodes value by creating an environment of high prices. This leads to a rising household debt-to-disposable-income ratio. The Land Expropriation without compensation narrative, as an example, will definitely have an influence on value of properties in both rural and suburbia, because it means land value might decrease in rural areas because people who own land will be forced to sell their land at lower prices if at any prices, meanwhile in suburbs/cities more people will be looking to invest in properties because property laws in suburb/cities are more protective of owners rights, which then increase properties price per square meter due to higher demand.
Business cycle
An example, during periods of economic expansion, there is a general trend of increases in overall output, employment, new construction, and prices. Due to the confidence that individuals have in the economy, creating economic expansion where there are generally more prospective home-buyers than there are individuals selling their home, creating surplus value for current home owners. The converse of the also holds.
