PROPERTY marketers Limestone Investment Properties have added their voice to the debate over whether Sandton's residential developments are heading towards a supply bubble, saying the precinct is "not even close to an oversupply".

Jarod Kolman , a director of Limestone , says Sandton was previously predominantly a commercial area and lacked a residential component.

"Now developers are playing catch-up and there has been a large influx of developments in that node," he says.

Kolman said there were 45000 people working in Sandton's central business district (CBD) and there were 2000 residential units. There might be an oversupply in the short term, but not in the long term.

Kolman says the Sandton CBD, in time, must follow world trends and thus a bustling, vibrant residential component will inevitably become an integral part of it. Sydney, Manhattan and London all have active residential components.

Another reason why demand for residential property in Sandton will increase in the near future is its traffic.

"T he average travelling speed in the Sandton CBD is 32km/h and by 2005 this will reduce to 12km/h. This is an offpeak speed and could halve during peak times, meaning that it could take one hour to travel just 6km by 2005," he says.

Last week, Business Day reported that speculators interested in upmarket residential developments in Sandton ran a risk of getting their fingers burnt as there were signs that the bubble would burst in the next 12 to 18 months.

Chris Renecle, a director of property developers Renprop, said speculative buying had increased, causing more supply and a glut of upmarket residential developments in the area.

Renecle said there had been plenty supply in the northern and western suburbs in the past two years and that they had found the demand for people who were buying property to live in themselves cooling off.

However, he said there had been a massive demand from speculative investors coming in and buying units in developments off-plan.

The rental market was softening and take-up of finished products was slowing, but the supply of upmarket residential unit s within a kilometre of the CBD was "massive".

Renecle said there were close to 800 units coming on stream in the next year but he warned that speculation in Sandton could be perilous.

Kolman disagreed there was any oversupply problem.

Nov 12 2003 09:45:02:000AM Nick Wilson Business Day 1st Edition