After the Bell: Joburg property and reasons for hope

When I was younger several of the older people around me would ask me an important question: When was I going to get on the property ladder?

When, in my late twenties, I finally bought a part of a property in Joburg there was a general air of excitement.

Not only was I, finally, growing up, but I was getting to the point where I would be on a ladder that was going to be important financially when I was older.

It was also the start of a long-term habit that saw me speaking to economists regularly. Some of them were property experts and would all pretty much make the same point: If you buy property you cannot go wrong.

I don’t blame them for what has happened in Joburg.

The scale of the problems in my city means it has been able to break what was an iron-clad law – that property values always go up.

Something similar might have happened in parts of KwaZulu-Natal around eThekwini. That metro too has had serious problems, to the point where many services have started to fail.

There, even the beaches– which should be safe from council intervention – could not be used because of sewage being pumped into the rivers.

Despite that, the property group Growthpoint has said it is planning more investments in that area.

When you consider how much damage was done there, first during the violence in July 2021 (which was so obviously inspired and encouraged by Jacob Zuma) and then by the flooding a year later, that seems quite brave.

But actually there is something happening in many of our cities at the moment, around the middle classes and the upwardly mobile.

It seems that people who can get out of “the city” to some kind of area around it, are doing just that. Not just to live, but also to work.

Whether it’s the huge middle-class settlements around Hartbeespoort outside Pretoria, or the areas north of Durban around Umhlanga and other parts, the dynamic is the same.

It’s a dynamic at least as old as Dainfern, which was one of the first large-scale settlements like this.

Certainly, there is money to be made here, both in providing homes and commercial property.

And, if you can, the case for buying your way out of the problems of a city is incredibly compelling.

Over the weekend it felt like half of Joburg didn’t have water. Again.

Despite all of the provinces that have been made promises so many times.

And frankly, you can’t really get away from the impression that sometimes the city is run by gangsters.

I say this without being worried about being sued, because the CEO of the Johannesburg Development Agency was arrested last week with cash believed to be from a cash-in-transit heist.

As News24 has reported, it appears that not one but two members of the mayoral committee are implicated in his alleged crimes.

At least one member of Dada Morero’s city cabinet has also been implicated in being part of the construction mafia.

At the same time though, I’m not always convinced that buying into these settlements is such a good idea.

Just recently there has been some discussion about whether prices in Joburg had bottomed out and were about to recover.

I can’t tell you if that is the case.

It might be that properties hit certain prices that were below their true value, and they have now simply risen to their true value; that they’ve bounced, but will not bounce up any further.

And the level below which Joburg’s property prices cannot fall is possibly higher than you might think. This is because the process of people who grew up in townships moving to suburbs still has huge momentum. And that must be driving so much of the development that you see around the city.

Or, as more and more people learn what it is going to take to live in a failing city (solar, borehole, active participation in the street and community groups, keeping the local swimming pool going) they’re realising that with money, agency and confidence comes the ability to still live a good life in the city.

I do think that at least keeps you involved in your community, and you stay a part of things. Even if it is in the small way of walking your dogs around the block and greeting everyone who walks past, it still matters.

I can’t tell you what is going to happen in the future. Any retirement plans you might make should probably not include a high value for your Joburg property. Rather consider the cost of your home and the cost of living, and go from there.

And it might be that Joburg, still at the centre of things, is about to turn around. Not just because of what might happen in the local elections, but because of how more and more people are just doing it for themselves.

As irritating and as time consuming and as frustrating as it can be. DM