Good news for Johannesburg homeowners

Jonathan Kohler, Founder and CEO of Landsdowne Property Group, said this is the ideal time to buy property in Johannesburg as it has hit the bottom of its property cycle.

However, experts stress that those on the market should be clear on what they intend to use their property for before jumping into a sale.

“Prices in Johannesburg are more accessible than in other metros,” Kohler explained. “With freehold homes especially, there’s real value if you’re looking to settle down.”

“Many buyers are shifting to secure estates, which opens opportunities in suburbs that are still central but less competitive.”

“With Johannesburg offering solid value and interest rates on the decline, now may just be the right moment to make your move,” he said.

Kohler explained that prospective buyers should, first and foremost, decide whether they want to buy a property to live in or to rent out as an investment. The answer will shape every buying decision, from location to loan type.

Buying a home to live in comes with several benefits. Since it is your own space, you can renovate and redecorate the property without deferring to a landlord first.

Over time, the home’s value will appreciate, and every bond repayment builds equity, making it an excellent long-term investment.

Homeownership also brings long-term stability since owning the property means no leases to renew or landlords to negotiate with.

Buying a property to live in also offers potential tax benefits. Depending on your financing, interest and property taxes may be deductible.

That said, Kohler noted that it’s not without its hurdles. There are steep upfront costs, such as deposits, transfer duties, and legal fees.

There are also ongoing costs like maintenance and insurance. If interest rates increase, so too can your monthly repayments.

Yet, with interest rates recently dropping, affordability is improving. Kohler believes this opens the door for more buyers, especially first-timers, to enter the market confidently.

Property as an investment

On the flip side, buying property as an investment is more practical. The goal is rental income and long-term growth. “A good investment property in a high-demand area can generate steady returns,” Kohler said.

This route can give investors a monthly rental income. If managed well, the rent can cover the bond and other expenses.

Investment properties also offer inflation protection. Since property tends to keep pace with inflation, your capital’s value will be maintained.

Like buying a house to live in, buying to rent also comes with tax relief, as rental expenses and interest can be deducted from taxable income.

Finally, this avenue also gives investors the benefit of capital growth since well-located properties tend to appreciate over time.

However, this is not a passive investment. Landlords must budget for maintenance, deal with tenants, and prepare for vacancies. “The trick is buying in a price bracket where your shortfall is minimal,” Kohler advises.

Ultimately, there is no universal answer about whether buying a property to live in or rent out is better. Buying to live in is often a lifestyle choice tied to emotional goals, stability and future security.

Buying to invest is a business decision requiring discipline, research and risk tolerance. However, when buying a property as an investment, Kohler stressed the importance of choosing the right area with strong rental demand.

“Put down a meaningful deposit. Get involved by attending complex AGMS, interrogating the financials and keeping an eye on maintenance. A hands-on approach can protect and even enhance your investment.”

Alternative property investments

Importantly, South Africans can invest in property without buying a home to rent. While physical property does offer advantages, investors also have access to a broader range of real estate investment options.

More South Africans are exploring indirect property investments through Exchange-Traded Funds (ETFs) designed for real estate investors who rely on regular income, with dividend payouts every three months.

“These investment vehicles give investors exposure to international property markets, dollar-based returns and regular income without the complexities of managing tenants or properties,” Kohler said.

Unlike physical property, which can take months to buy or sell, these funds offer greater liquidity. Investors can buy in or cash out relatively quickly, and the entry point is often lower, with no transfer duties or legal fees.

However, as with most investments, you hand over control. “You cannot renovate or reposition the asset, and your returns are ultimately linked to how well the fund is managed and the performance of global property markets.”

As with any investment, Kohler advised doing thorough research before committing. It’s essential to understand the property, all associated costs, including maintenance or management fees and the expected returns.