Property Prices and Crime

The information in this article is courtesy of Realestateweb (Crime and your property’s value – 15 April 2009).

According to the FNB Residential Property Barometer Q1 2009, 10% of total sellers of residential property are selling because of safety and security reasons.

The Barometer shows that Gauteng showed 12% of seller moving for safety reasons and the Eastern Cape 17%. KwaZulu Natal showed 6% with the Western Cape having 5% of the province’s sellers moving because of crime.

John Loos, FNB Property Strategist, are also of the opinion that more and more people are moving to secure places such as gated communities and complexes compared to freehold homes.

However, Loos explains, the impact of crime on the property market affects the long term of property performances in the sense that property owners have to spend more money on crime prevention and security measures in their properties.

This does not mean that there will be a sudden increase in property prices in secure areas. Loos recons that the turn of the market might see prices rising in places conceived as safe and secure.

Loos said to keep in mind that people also move to gated communities as they are convenient and offers the “lock up and go” option.

The current situation in South Africa shows that property prices in places like Dainfern in Johannesburg are holding up nicely, but this might also mean that the wealthy people living in these areas have more cash, so they are not as interest rate sensitive.

Loos added that Johannesburg is the business hub of Southern Africa and businessmen has no choice but to live close to this city. These businessmen are more likely to live in safer places close to Johannesburg.