SPECULATORS have been buying some of the "affordable" housing being developed by private developers in the planned suburb of Cosmo City, in North Riding, Randburg.

Although this could defeat the purpose of affordable housing, by pushing up prices, property economist Francois Viruly says it could benefit the suburb by creating a mix of high and low-income groups and a vibrant community.

Lewis Civin, head of the development division of Jawitz Properties, which is marketing some of the units being developed privately, confirms that speculators have been buying units in the area. However, Civin says speculators are buying less than half of the units in the R250000 to R500000 range.

He says owner-occupiers are snapping up units as quickly as speculators, offsetting any harm. "Speculators normally have an impact on prices when they buy all the units up very quickly at the launch of a development. But at Cosmo City there has been a tremendous take-up of units by buyers wishing to live there."

He says there are three types of unit in Cosmo City. One portion of the development consists of reconstruction and development programme-type housing where no speculation is allowed. These units are small, with one bedroom, and are provided free by government. Civin says there is a waiting list for these and this portion is administered by the national housing department.

Another portion of the suburb will consist of low-cost housing where buyers are subsidised by government. No speculative buying is allowed here either.

Civin says that, at the "other extreme", there are affordable units being developed privately with no government influence. These are priced from R250000, with some at more than R500000. "These units are open to all market forces."

Civin says Jawitz is marketing part of the affordable housing component, and there has been a limited number of speculators.

Of those buying to live in the affordable housing units, there is an equal split between blacks, whites and Indians, Civin says.

"Generally these are all first-time home buyers who have been renting elsewhere."

Viruly says he does not think speculative investment at Cosmo City is necessarily a bad thing. "I think in these areas it’s a good thing to see social housing next to houses where people come from higher income groups. I get nervous when we get areas dominated by the lowest income groups."