Buying a new development to avoid transfer duty?

The simple answer is generally, no. Your first question should always be: Does it meet the Property Investment Principles? (pinned tweet)

Here’s a comparison between a new development in Tembisa (ema W) and Alex (ngase rank).

Both places are similarly priced and about the same size. Only difference is location.

You’d be ‘saving’ R30k in transfer duty & R845 in transfer and bond registration costs if you bought in Tembisa.
You would however be taking a massive risk on location. Like it or not Alex has the premium address in comparison, it is after all in Africa’s Richest Square Mile.

Question than is, do you want to save R30k and risk a more viable ‘investment’ location?

Closer to big business, better schools, healthcare facilities and recreational facilities etc.

Which of these makes the better ‘landlord’ investment option?

Neither, they are both ‘over priced’.

Investing in property to make a return requires more discernment than just buying a property & the considerations will not be exactly the same as buying a residential property.

I.e The top end rental for a 2 bed rental in Tembisa is R9k and about R12k in Alex (and this is being very generous considering current market conditions).

Both rental incomes would be significantly less than your monthly bond repayment. Add to that rates and levies = TEARS!

In Tembisa you are looking at a R6k bath each month in year 1 and about R4k in Alex.
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With increases in rent looking negative in the medium term. You’ll be taking a cold bath for a very long time and even though middle income rentals are holding strong, consumers are generally under pressure and this will continue to strain rentals.

A bath simply means taking significant losses on an investment before someone comments about Sunlight and Nivea body wash here.