Is buying a property in Sandton a good investment?

Last updated on December 14, 2023

Yes, the analysis of Johannesburg's property market is included in our pack

If you've admired the business district and upscale living in Sandton, you may have contemplated investing in a property here, making it your elegant and dynamic residence in Johannesburg, South Africa.

Is it a good idea though? What's the current state of the real estate market in that area? Are property values appreciating or depreciating? Are investors seeing returns on their real estate investments? How's the demand for rentals?

We'll answer all these questions for you! When building and updating our property pack for South Africa, our team has been researching and surveying this area. In fact, there is significant customer interest in investing there. Therefore, we believe it would be beneficial to include some information about it in our property pack.

Why do property buyers like investing in Sandton?

Sandton, nestled in the heart of Johannesburg, stands out as a highly sought-after location for property buyers, and for good reasons.

Often referred to as Africa's richest square mile, Sandton's allure lies in its unique blend of modern urban lifestyle and commercial vibrancy. It's a dynamic hub where business and luxury coexist, making it quite distinct from other real estate markets.

Now, when we delve into what makes Sandton particularly appealing, the first thing that comes to mind is its status as a financial center.

This area is home to major financial institutions and corporate offices, drawing professionals who seek the convenience of living close to work. Compared to other areas in Johannesburg, Sandton offers a more upscale, cosmopolitan lifestyle, which is a major draw for certain buyers.

The rise of Sandton as a popular choice for property investment didn't happen overnight. It began to gain prominence in the late 20th century, particularly after the establishment of the Johannesburg Stock Exchange in this area in the 1970s.

Since then, it has steadily grown in reputation and infrastructure, cementing its place as a top choice for high-end real estate.

Given its features, Sandton naturally attracts a specific demographic. You'll find that it's particularly appealing to business professionals, expatriates, and well-to-do families looking for a blend of luxury, convenience, and accessibility.

The area's modern apartments, gated communities, and high-end amenities cater to their tastes and needs.

However, every place has its drawbacks, and Sandton is no exception. One of the primary concerns is the cost. The high property prices and living expenses in Sandton can be prohibitive for many, making it less accessible compared to more affordable Johannesburg suburbs.

Moreover, with its focus on high-end development, Sandton sometimes faces issues like traffic congestion and a somewhat impersonal, corporate atmosphere, which might not appeal to everyone.

In essence, while Sandton's blend of luxury, convenience, and business opportunities make it an attractive locale for property buyers, it's important to weigh these benefits against the high costs and urban-centric lifestyle that come with living in one of Johannesburg's most prestigious areas.

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Why is Sandton a nice place to live?

Sandton offers a distinctive and appealing lifestyle for its residents.

This area in Johannesburg is known for its vibrant mix of modern urban living and business energy, making it a popular choice, especially among professionals and expatriates.

When you think about the lifestyle and culture in Sandton, imagine a place where luxury meets convenience. The area is bustling with high-end shopping centers like Sandton City and Nelson Mandela Square, which are not just shopping destinations but also cultural hubs where people gather, dine, and enjoy various entertainment options. This creates a lively, cosmopolitan atmosphere that's hard to find elsewhere.

The expatriate community in Sandton is quite significant, thanks to the area's status as a financial and business hub. This has led to a multicultural environment where various international cultures blend seamlessly with local South African traditions.

As a result, you'll find a variety of international schools catering to different nationalities, such as the French School of Johannesburg and the American International School of Johannesburg, making it easier for expat families to settle in.

Living in Sandton, however, does come with a higher price tag. The cost of living here is relatively high compared to other parts of Johannesburg.

This is reflected in the property prices, rental costs, and day-to-day living expenses. For those who can afford it, the lifestyle offered is often considered worth the cost.

Safety is a paramount concern in any city, and Sandton is no exception. While it's generally considered safer than some other parts of Johannesburg, residents often take standard urban safety precautions, such as secure housing complexes and private security services.

The amenities and facilities in Sandton are top-notch. You'll find well-equipped hospitals like the Morningside Medi-Clinic and the Sandton Mediclinic, offering excellent healthcare services. The area also boasts numerous high-quality schools, both public and private, catering to a range of educational needs.

Infrastructure in Sandton is another strong point. The roads are well-maintained, and the area has reliable utilities and internet connectivity, supporting both the residential and business communities.

Accessibility is one of Sandton's strengths. It's well-connected to other parts of Johannesburg via major roads and highways. For those traveling further, the Gautrain, a high-speed train service, provides a quick link to the O.R.

Tambo International Airport, making international travel relatively hassle-free. The Gautrain also connects Sandton to Pretoria and central Johannesburg, offering a convenient option for daily commuters.

Public transportation options in Sandton, apart from the Gautrain, include a range of bus and taxi services. However, it's worth noting that many residents prefer using personal vehicles or ride-hailing services for daily commuting due to convenience and comfort.

How much does it cost to buy real estate in Sandton?

If you need a detailed and updated analysis of the prices, rents and yields, you can get our full guide about real estate investment in South Africa.

Buying a property in Sandton can be an exciting yet complex endeavor, given the diverse range of residential properties and the dynamics of the real estate market.

In Sandton, you'll find a variety of property types, including apartments, traditional houses, and luxury villas. Each of these caters to different lifestyles and budgets, making the area versatile for a range of buyers.

The types of properties that are particularly in high demand in Sandton are luxury apartments and high-end villas. This demand is driven by the area's status as a financial and business hub, attracting professionals and expatriates who often prefer modern, low-maintenance living spaces with amenities.

These properties are favored for their convenience, security, and lifestyle offerings, such as proximity to business centers, shopping malls, and entertainment venues.

In terms of new developments versus resale properties, Sandton is an area where both options are readily available. There's a continuous development of new residential projects, including high-rise luxury apartments and gated communities, catering to the growing demand for upscale living spaces.

However, the market also has a substantial number of resale properties, which often come with their own charm and established neighborhoods.

Talking about prices, the cost of buying property in Sandton varies widely based on the type, size, and location of the property. On average, prices per square meter can range significantly.

For example, luxury properties and penthouses in prime locations will command much higher prices per square meter compared to standard apartments or older houses in less central parts of Sandton.

Over recent years, property values in Sandton have experienced fluctuations. Like many upscale areas, the market here can be sensitive to economic trends, both local and international.

Factors such as changes in the business environment, interest rates, and overall economic health play a significant role in influencing property values.

Looking ahead, the real estate market in Sandton shows potential for growth, particularly with any upcoming developments or city planning changes. New business developments, improvements in infrastructure, and the introduction of lifestyle amenities can all contribute to an increase in property values.

Specific upcoming developments or major city planning initiatives can significantly impact the market, making certain areas more desirable.

Predicting the future of the real estate market always involves a degree of uncertainty. However, given Sandton's continued status as a business and lifestyle hub, one can expect a sustained interest in the area's real estate.

Potential increases in property values could be driven by factors such as the development of new business districts, improvements in public transportation and infrastructure, and the general appeal of the area as a prestigious address in Johannesburg.

Where is the best area to buy a property in Sandton?

When looking for the best area to buy a property in Sandton it's important to understand that Sandton is not a monolithic entity; it comprises various neighborhoods, each with its unique characteristics, atmosphere, property types, and prices

In the heart of Sandton, areas like Sandhurst and Hyde Park are synonymous with luxury and exclusivity. These neighborhoods are known for their spacious, opulent homes and sprawling estates, often favored by high-net-worth individuals.

The atmosphere here is serene and private, offering a tranquil escape from the hustle and bustle of city life. However, the exclusivity comes with a high price tag, making these areas some of the most expensive in Sandton.

On the other hand, areas like Bryanston and Morningside offer a slightly different vibe. These areas are popular among families and professionals for their blend of suburban tranquility and urban convenience.

You'll find a mix of modern apartments, townhouses, and larger family homes. The prices here are somewhat more varied, catering to a broader range of budgets, though still leaning towards the higher end.

For buyers interested in up-and-coming areas within Sandton, neighborhoods like Fourways and Lonehill are worth considering. These areas have been experiencing growth and development, attracting a younger demographic and first-time home buyers.

The property types are diverse, ranging from apartments to family homes, and the prices are generally more accessible compared to the more established areas of Sandton.

When it comes to areas where it's advisable to look for property, consider your lifestyle needs.

If you prefer a bustling, cosmopolitan atmosphere close to business centers, Sandton CBD or areas around Sandton City and Nelson Mandela Square are ideal. For a more family-oriented environment, look towards suburbs like Bryanston and Morningside.

Conversely, there are areas within Sandton that might not be advisable for everyone. For instance, while the central business district offers great convenience for working professionals, it might not be the best fit for those seeking a quieter, more residential atmosphere.

Also, some areas might be undergoing extensive development, which could mean dealing with construction activity and the potential uncertainty of evolving neighborhood dynamics.

Here is a summary table to help you visualize better. If you need more detailed data and information, please check our property pack for South Africa.

Area	Atmosphere	Property Types	Price Range
Sandhurst	Serene, Private	Spacious homes, Estates	High
Hyde Park	Luxurious, Exclusive	Opulent homes, Estates	Very High
Bryanston	Suburban, Family-friendly	Apartments, Townhouses, Family homes	Moderate to High
Morningside	Urban, Convenient	Modern apartments, Family homes	Moderate to High
Fourways	Developing, Youthful	Diverse, From apartments to family homes	Moderate
Lonehill	Up-and-coming, Varied	Diverse, From apartments to family homes	Moderate
Sandton CBD	Bustling, Cosmopolitan	Apartments, Close to business centers	High

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Is there a strong rental demand in Sandton?

Sandton is known for its strong rental demand, stemming from its status as a financial hub and a desirable residential area.

The rental market in Sandton caters to a mix of both short-term and long-term needs, with varying demands based on the specific areas and types of properties.

In terms of rental duration, there's a notable demand for both short-term and long-term rentals. Short-term rentals are particularly popular among business travelers and tourists who visit Sandton for its array of corporate offices and luxury amenities.

Long-term rentals, on the other hand, are sought after by professionals, expatriates, and families who are either working in Sandton or want to enjoy the lifestyle it offers.

The target demographic for rentals in Sandton is quite specific. It predominantly includes business professionals, expatriates, and well-to-do families. These individuals often look for properties that offer convenience, security, and a certain standard of living.

For professionals and expatriates, modern apartments or townhouses that are close to business centers and have good connectivity are highly sought after. Families, meanwhile, might lean towards more spacious homes or apartments in areas with good schools and family-friendly amenities.

When it comes to the types of properties in demand, there's a clear preference for well-maintained, secure, and ideally furnished properties.

Apartments in high-rise buildings or secure complexes are particularly popular, as they often come with additional amenities like gyms, pools, and sometimes even concierge services. In terms of specific areas, neighborhoods like Bryanston, Morningside, and the Sandton CBD are highly desirable due to their proximity to business districts and lifestyle amenities.

To reduce vacancy and attract tenants, offering certain amenities can be a game-changer. Features like high-speed internet, modern appliances, secure parking, and access to communal leisure facilities can significantly increase a property's appeal.

In addition, properties that are well-connected to public transportation, shopping centers, and entertainment hubs are more likely to be in demand.

Regarding the potential returns on investment, properties in Sandton can offer attractive yields, though this can vary based on the property type and location.

Generally, well-located apartments in popular neighborhoods can yield healthy returns, given the high demand. However, it's important to factor in the costs of maintenance, security, and any additional services offered to tenants.

Looking at trends, properties that offer a blend of luxury and convenience are gaining more demand. This includes apartments in high-end complexes with amenities and townhouses in gated communities.

These types of properties are increasingly popular among the target demographic in Sandton and could potentially offer better yields due to their desirability and the lifestyle they offer.

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Is it easy to buy a property as foreigner in Sandton?

Before we answer the question, please know that we have an article dedicated to the experience of buying real estate as a foreigner in South Africa.

Buying a property in Sandton, Johannesburg, as a foreigner is relatively straightforward, but it does come with certain considerations and procedures specific to South Africa.

Firstly, there are no significant restrictions on foreign buyers owning property in South Africa. Unlike some countries that impose strict regulations on foreign property ownership, South Africa is quite open.

However, there are a few regulatory aspects to be aware of. For instance, foreign buyers are required to register with the South African Reserve Bank, which is more of a formality than a barrier.

Additionally, when it comes to financing, foreign buyers may face some limitations, as local banks might only offer limited financing options or require a higher down payment.

The purchasing process in Sandton involves several steps. After identifying a property, you would typically make an offer, negotiate with the seller, and upon agreement, sign a purchase agreement.

This is followed by a due diligence period, where you should conduct a thorough inspection of the property. The final step is the transfer of the property, which is handled by a conveyancer (a type of lawyer specializing in property transactions). The process can take several weeks to a few months, depending on various factors.

When it comes to risks associated with property investment in Sandton, the primary concerns are market volatility and security. The real estate market can be susceptible to economic fluctuations, which might affect property values.

Additionally, while Sandton is a relatively safe area, security is a significant consideration in any South African property investment, and ensuring adequate security measures is essential.

There are classic pitfalls or common mistakes to be aware of. One unique aspect to consider in South Africa is the issue of 'voetstoots', a clause often included in property sales agreements.

This clause means that the property is sold 'as is', and the seller is not liable for any defects unknown to them at the time of sale. It's crucial to have a thorough property inspection to avoid surprises after purchase.

Working with a local real estate agent or lawyer is highly recommended. A local agent can provide valuable insights into the Sandton property market, assist with negotiations, and guide you through the local nuances of property buying.

Similarly, a local lawyer or conveyancer is essential for navigating the legal aspects, ensuring compliance with local laws, and handling the transfer process.

Common exit strategies for property investors in Sandton include selling the property for capital gain, especially in areas with high appreciation potential, or renting out the property for regular income.

Given Sandton's status as a business and residential hub, rental properties can be a lucrative option, provided they are well-maintained and located in desirable areas.