Residential property manager Trafalgar said its efforts to boost demand for apartments in the inner-city areas of Hillbrow, Berea and nearby suburbs had paid off, with clients making profits of 300% within a year.

The group said last week that clients had increased profits three-fold or more within a year as investors pushed prices close to an average of R100 000 for individual flats in an effort to get high-yielding properties.

Trafalgar's services include everything from the sale of units and blocks of flats to letting and management.

"Up until now the main demand has been from investors buying whole blocks of flats, but a lot of the bargain opportunities have dried up," said Trafalgar CEO Neville Schaefer.

"So when we opened our office in October, we found eager buyers of individual units."

He said the market was underpinned by demand for flats to rent from upwardly mobile people in the inner city.

Schaefer said flats in decent condition in the price range of about R40 000 to R50 000 were sold almost immediately. They delivered net incomes of up to R8 000 a year or yields of up to 20%, compared with yields of 7% or less in other high-density residential areas, he said.

Property economist Erwin Rode, of Rode & Associates, said this was a "classic example of high risk, high returns".

"Evidently the risk in Hillbrow and surrounds is hellishly high, but the quid pro quo is that investors demand and get very high yields at 20%."

In five years an investor could earn his money back, he said.

Business Day