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Residential property in Johannesburgs Observatory remains a savvy investment
Category Property News
The established Johannesburg suburb of Observatory offers the trifecta of desirable residential property; value for money, convenient location and a secure lifestyle.
Luciana Castellani, Area Specialist for Lew Geffen Sotheby’s International Realty says: “Observatory not only offers proximity to the same amenities enjoyed by exclusive neighbours like Mountainview and Houghton, it also boasts predominantly freestanding homes on large grounds, but at a fraction of the price.
“In Observatory it’s still possible to buy a solid original unrenovated house for between R1.5 million and R1.8m, whilst modernised family homes, often on stands of up to 2 500m², are generally priced between R2.5m and R4m.”
According to Castellani, its excellent value for money is the reason that the suburb fared so well during the economic crash of 2008.
“Unlike most other areas, immediately after the crash we saw an increase in demand in Observatory, as savvy investors took advantage of the general market slump and excellent value. Although property prices did drop thereafter, the market remained active and recovered quickly, rewarding those investors with a good return.
“During 2008 there were 40 registered transfers in Observatory and by 2014 this number had risen to 74, with the average house price increasing from around R1.8m to around R2.4m.”
Marco Castellani, Partner Area Specialist for Lew Geffen Sotheby’s International Realty says: “In spite of the current socio-economic conditions, the market here is brisk, with the most activity seen in the mid-market segment where renovated family homes priced between R2.5m and R3.5m are very popular.
“There is also high demand for unrenovated houses due to the accessible price point of these properties, which appeal especially to younger buyers, predominantly professionals with growing families because of their affordability and great scope to add value through restoration.
He adds: “Observatory is the suburb with the highest elevation in Johannesburg and homes with a view sell at a premium.”
Lew Geffen, Chairman of Lew Geffen Sotheby’s international Realty, says that another strong drawcard is the suburb’s original character has largely been maintained, with no commercial activity other than a few small businesses in converted old homes on the main roads.
“Heritage homes are still a prominent feature and the suburb offers a family-orientated, old world gracious lifestyle, which fosters a sense of community that is reinforced by two well-managed boomed areas.
“There are also very few sectional title properties in Observatory, and a limited rental market as investors who buy homes here generally upgrade and modernise their properties to live in rather than to rent out.”
Geffen adds that because of the lack of available rental property, owners whose homes have self-contained cottages can yield an excellent rental return, which is a good way to cover a portion of the mortgage repayments in the case of bonded properties.
Observatory’s central location is one of its main attractions. Many of Johannesburg’s top schools such as Sacred Heart, Kes and St John’s are nearby and the suburb is also a stone’s throw from myriad cultural venues now situated in and around the city centre.
Nearby Eastgate Mall offers every retail convenience and Johannesburg’s oldest golf course, Observatory Golf Club, lies within the suburb.
Observatory is also only 10 minutes from OR Tambo International Airport and enjoys easy access to the highways which lead to Sandton, Centurion and Pretoria. Despite its convenient location, Observatory residents still enjoy the feeling of being remote from the eternal bustle of city living as the suburb has remained quiet and sedate, despite its proximity to busier neighbours like Cyrildene.
Author: Lew Geffen Sotheby's International Realty
