“Housing reports released late last year by both Absa and Standard Bank confirm that while house price growth for the country as a whole has dropped to its lowest level in years, inner cities seem to be bucking the trend,” says Mike Bester, CEO of Realty1 International Property Group.

“In December 2007, house prices in Johannesburg's inner city were still surging ahead at a substantial 41%, according to a report by mortgage risk management company Lightstone,” says Bester.

The report showed a similar trend in evidence during 2007 in other metropoles, including Cape Town, Durban, Port Elizabeth, East London and Randburg, with Cape Town currently recording growth of around 10%, and Port Elizabeth and East London at 33%.

To date, Cape Town is perceived to have had the most successful turnaround. Founder member and a director of the Cape Town Inner City Improvement District Theodore Yach said that since the beginning of the cleanup process in 1999 almost 3,000 new residential apartments had been made available by different property developers in the central city district. Sold at an average price of R1m, 75% of the apartments were intended for owner occupation while 25% were to be leased to tenants, said Yach.

But during a July 2007 study conducted by a property company focusing on the Cape Town CBD, a canvas of inner city business owners on the success of the revitalisation effort produced predominantly dim views that the benefit of the higher numbers of inner-city residents seem to be evading retailers.

Long Street bookshop owner Graham Leigh said the increase in business that he had expected had not materialised. However, he believed that more tourists were visiting the CBD now than in the past as they felt safer, and that this was definitely a step in the right direction.

So how successful are the various CBD revitalisation efforts really and is investing in property in these areas viable?  It can be a risky venture, warns Bester. “With the current slowdown in the economic environment, buyers need to be sure they are playing safe with their investments,” he says. “All indications are that the inner cities have done well up to now, but investors have found it difficult to rent out their buy-to-lets and nobody really knows whether the CBD efforts are going to be successful in the long term.”

Popular loft-style apartments in buildings like Hillbrow’s recently-refurbished Ponte sell for up to R1m for a three-bedroomed unit. The average investor buying with an 80% bond on the property would need to rent these apartments out for at least R9500 per month to cover his costs. Taking account of the fact the area surrounding the building has not been subject to a similar revitalisation as yet, it follows that a family with children that can afford this type of rental amount is unlikely to want to live in this environment when for the same price they can rent a house with a double garage and a swimming pool in one of Johannesburg’s more upmarket suburbs.

“Durban has seen a similar problem with the redevelopment of its Point precinct,” says Bester. “Residents of the exquisite apartments in the refurbished Point Prison, now known as the Point Bastille, run the gauntlet of the flatland around Addington Hospital to get home. Most of the blocks are derelict and home to building hijackers, warlords, drug users and prostitutes, which makes travelling through the area late at night decidedly dangerous.”

So trendy it might be to invest in the inner city, but Bester believes in the current economic environment a traditional freehold or sectional title property in a quality suburb or estate with good security is still a safer investment.

“It’s far easier to get a mortgage bond on a traditional property,” he says, “as well as to find reliable tenants if you are buying to let. If you plan to live on the property, the inner city is no place for a traditional family.”

Bester says he is not questioning that there is a market for these “trendy” properties, but he believes that this type of investment is best left to those who can afford to take the risks attached to buying and living in these areas.