When house prices were rocketing by up to 30% a year over the past few years, buyers had little time to really look around. Now that the market is in recession, time is on the buyers' side.
"The market has turned the corner, with sales volumes about 20% up from their lows and price inflation marginally positive," says Anthony Miller, CEO of Lightstone Risk Managers, which provides an index of house resale prices and assesses suburb risk for mortgage lenders. "But we expect the recovery, especially prices, to be slow and steady for the foreseeable future."
Economists say average house prices are unlikely to significantly beat consumer price inflation until after 2013 (see story "Boom is far away"). So if you're a buyer, you can take your time for the first time in a decade to seek the place that suits you best. Getting it right can add to your family's quality of life and even give you better capital growth. But it's easy to get it wrong. The average SA family will move only two or three times before the children leave home - not enough time to become adept.
Estate agents are the ones they lean on most, but agents are sales people who promote their stock, they're not guides or teachers. And the choices available, especially in a buyer's market, are confusing. Yet you can search systematically for the best home or a rewarding investment.
Ian Slot
First identify the most suitable suburbs. Clear favourites emerge from the 5 223 SA suburbs registered with the deeds office. As with the stock exchange, the sum of buyers' subjective choices usually has a reason for being so popular (see list of great suburbs opposite).Adrian Goslett (32) and his wife, Vicky, had a single overriding reason for buying their home in Cape Town's Meadowridge (current Lightstone average transaction price is R1,9m) when he relocated to take a job as assistant regional director in SA for US estate agency franchisor Remax. They wanted their children, aged one and three, to go to Sweet Valley, a highly rated government primary school in nearby Bergvliet, and had to live in the feeder zone to qualify.
"Meadowridge was the nearest suburb in my price range," he says.
Dennis Moss
International research shows that good schools are the most important reason suburbs are popular. UK estate agent Savills has found that suburbs with schools boast house prices 16% higher than equivalent suburbs without them.Unrecognised premiums: this doesn't seem to be the case in SA's cities. There's little difference in price between, say, Parkview (average transaction price R2,49m) in Johannesburg and Craighall Park (R2,27m) about 5 km north of it, though Parkview is surrounded by top private schools: The Ridge, Parktown Girls High and Parkview primary. They are good government schools within walking distance from most homes. And Parkview has an environmental and cultural richness, including Zoo Lake, churches, and one of SA's best retail streets, that justify a greater premium.
Some canny parents are moving into flats in Killarney (R982 000) and Parktown (R530 000) so their children can attend top private schools Roedean and St John's College next door to Houghton (R3,7m).
Anthony Miller - Slow recovery
The potential price premium in suburbs that have the qualities buyers want will probably be realised over the next decade as traffic congestion grows and residents have to rely on their suburbs for more of their needs. If you buy in a suburb with unrecognised premiums, your capital gains can outstrip the average price increases in that city.Significantly, the investment potential of a suburb seems low down on most home buyers' priority lists, beyond the general potential for capital growth of a city or region. This is probably wise because the compromise buyers make between all the things they want inevitably reduces its investment potential. A home is primarily a comfort purchase and there's an argument for separating it from your other investments (see "Smart money rents").
The second key buyer's need is access to the job he or she has moved to. "It's a bonus living in Meadowridge; my office is only five minutes away in next-door Wynberg (R1,37m)," says Goslett. "In fact, seeing the growing congestion on the M5 highway near us, I would probably resign if the company moved to the Cape Town CBD."
Traffic congestion is influencing how suburbs are evolving. It has sparked the emergence of village-like nodes where residents can have home, work and play near at hand. Pam Golding Properties' Ronald Ennik says he has buyers who've recently moved from Bryanston (R3,3m) to Houghton because the mothers are on the road four hours a day taking the children to Roedean and St John's.
To reach a decision, buyers must compromise price and work-distance limits, sport, school and leisure opportunities and the houses they really want. There are at least eight most-important qualities of suburbs that must be juggled (see graphic opposite).
But what makes a rich environment varies from city to city. "People in Cape Town choose a sea view on the Atlantic coast or the leafy suburbs of the southern suburbs," says Seeff director Ian Slot. "There are a number of microclimates in metropolitan Cape Town. Clifton (R14,9m) probably has the mildest and sunniest of them, while Newlands (R2,8m) has the wettest and Bloubergstrand (R2,9m) the driest." In Durban, Durban North (R1,9m) is close to the beaches but can be hot and humid, while Kloof (R1,48m) up the hill is leafy and more temperate.
Culture counts as well. There are cultural variations, with the emerging black middle class (who make up 54% of the population) introducing a new driver of popularity. They tend to have more homes than other groups - in the township, rural areas, and even one or two in an informal settlement. Add social life as a higher priority than the often self-sufficient white family, and they need access to various points of the compass.
They have made Midrand (R1m) - with its highways providing a quick ride to the "kasi" (township) - one of Gauteng's most popular suburbs.
"It's an archetype for black aspirations," says Leapfrog estate agency director Kura Chihota. "It's where the emerging black diamond in his sparsely furnished townhouse with his GTI in the Midrand suburb of the Erand."
It is also first choice for people who aim to move out of the inner-city flatlands of Johannesburg. "The snob factor is very high and ultimately they want to have a home they can bring Gogo (granny) to that shows her they've made it," says Chihota.
Bryanston tops the bill. But there are strong signs, particularly in Johannesburg, that formerly racially separated suburban communities are integrating fast. Extended families and the suburbs that cater for them are still a strong part of Indian culture. Muslims want to be near mosques and Jews near synagogues, with the ultra orthodox living in special enclaves, such as Sydenham in eastern Johannesburg.
Security is vital for most families but there seems to be a clear, growing division over whether gated estates or community co-operation does it best. Those who choose the estate option point to the freedom with which their children can play safely on the streets. Those in more traditional suburbs liken the authenticity of their environments to the contrived nature of the gated estates and the cheek-by-jowl concentration of houses. Though values are higher in the estates than outside them, they tend to be in newer and lower-priced development areas than the older, leafy suburbs. For example, there's little difference in price between gated Dainfern (R3,6m) and Bryanston, 8 km away.
Which are the most liveable suburbs? Ennik believes Johannesburg's "Parks" are SA's best - Parkview, Parktown North (R2,9m), Parkwood (R2,26m), Forest Town (R1,76m), Parkhurst (R1,8m), Parktown (R3,6m), Saxonwold (R5m), Westcliffe (R8,77m) and Greenside (R1,75m).
"They have excellent schools, few traffic problems, parks and sports facilities, beautiful tree-lined streets, local shops and pavement cafes, and early 20th-century architecture, of which many homes have been tastefully modernised," he says. "And they have superb access to Rosebank and the imminent bus rapid transit (BRT) system and Gautrain. They've been the suburbs giving our agents some of the best sales turnover in the recession."
Buses have changed it all. The "Parks" and eastern suburbs like Kensington (R510 000) were developed in the early 20th century as Johannesburg grew from a mining town into a city. The new "trolley buses" gave middle-income households freedom from the inner-city grime with low-cost access to large plots of land on the outskirts of the city where developers punted the curative powers of nature.
Cape Town's "southern suburbs" grew in the same way along the railway line to Simon's Town. Rondebosch, Newlands, Claremont, Kenilworth and Wynberg are strong contenders for even better liveability than Johannesburg's Parks. Cape Town's Atlantic suburbs had to wait for buses before Green Point, Sea Point, Fresnaye and Camps Bay were developed.
The Durban suburbs of Essenwood (R1,35m), Glenwood (R1,3m) and Durban North, as well as Pretoria's Colbyn (R1,1m), Brooklyn (R1,8m) and Lynnwood (R1,8m) came about in the same way.
There are suburbs with similar qualities in what are now city metros but which were distant municipalities 100 years ago. Any older town or small city will also have suburbs with these qualities. For instance, buyers who want the old suburban lifestyle but find the prices in the prime areas too rich could go to Florida in Roodepoort (R658 000) or Lakefield in Benoni (R1,35m). They have all the amenities of schools, parks and high streets.
Developers laid out the townships in simple grids with access from many streets. Schools, religious buildings, parks, post offices, libraries and local shops followed quickly. New communities sprung up. The motor car gave access to even further out. Planners began separating home, business and manufacturing into separate areas, cars made shopping centres possible. Planners decided there had to be a hierarchy of small private streets, extending into connector roads and then to main highways. Many modern suburbs were given crescents and culs-de-sac with curving streets snaking around them. Something changed - suburbs lost their coherence.
How can you achieve the best quality of life? What are the future trends?
Stellenbosch-based urban designer Dennis Moss argues that quality of life and space, which have been connected through 6 000 years of human settlement, have been "fractured". But the trend is turning back to connecting life and space again and the older suburbs are being rediscovered by people who have spent their first years in the late 20th-century areas.
Moss says the "simple, first order" grids of the older suburbs allow more extensive ordering through which the residents can make a world of their own.
For instance, the architecture of most of the houses allows them to be modernised to suit their changing occupants. Small business streets continually change and upgrade. They allow constant development that will make them more complex, richly connected and efficient. "This increases a sense of connection in time and space," says Moss. "There's continuity via openness and connection."
It's difficult to imagine modern suburbs and most golf estates, with their mono-social economic populations, complex hierarchical roads and Tuscan, Balinese and other post-modern plastic palaces, allowing continuous change. Moss is attempting to provide a modern version of the leafy suburb in Heritage Hill, a mixed-use township he has designed between Centurion and Midrand in Gauteng. He is also designing a series of villages on Boschendal wine estate in Franschhoek. It will take many years to prove his point.
WHAT IT MEANS
 Each city has favourite family suburbs
You can be rewarded if you take your time
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Meanwhile, important changes continue in SA's favourite suburbs. The growing concentration on family and "cocooning " means buyers are investing far more in their homes. They are staying in them longer, on average 10 to 13 years from five to seven years a few decades ago. This gives them a chance to strengthen their connections and build more effective communities.
"You can see strong social formation in events like Halloween in suburbs including Bantry Bay," says Samuel Seeff.
These social formations are being amplified by retail trends. Cape Town's Cape Quarter at De Waterkant provides intimacy and individuality of retail and leisure stores that has been copied by the Parktown Quarter in Parktown North, Johannesburg, and will be seen in many character suburbs in future.
The burgeoning pavement cafés offering Wi-Fi are becoming the social focus of The Berea, Camps Bay, Port Elizabeth Central, Hatfield, Parktown North, Kensington and in hundreds of suburbs around the cities. The Internet allows suburban residents to spend more time at home, encouraged by traffic congestion. These fads are strengthening the social dynamics of the residents, as cafés did in Paris and Vienna in the 19th and early 20th centuries.
Violent crime remains a threat. Lightstone's Miller warns that it could become the overriding issue, making gated communities the most popular. The BRT systems will also bring great changes, making the outlying newer suburbs and rural areas more accessible and popular. But SA's older suburbs will probably survive this competition to become our favourites.
Ranking the Analysts 2009
