Observatory and Woodstock are the suburbs to be in 2015

Stock shortages have been very much in evidence for most of this year in Observatory, Woodstock and Pinelands, says Craig Gilfillan, the Rawson Property Group’s franchisee for these suburbs.

“There has been a slight increase in homes for sale just recently, which is probably due to the onset of summer and to the expiry of many rental leases, but stock acquisition has become and will remain the big challenge facing most estate agencies in the southern suburbs,” he says.

When homes do come up for sale, say the Rawson staff at Observatory, they are usually signed for in under two weeks.

As almost always happens when stock is in short supply, price rises have peaked. Gilfillan estimates that on the homes he and his team have sold this year the average year-on-year value increase has been 15 percent to 20 percent – with slightly less spectacular rises at the top end of the area’s price scale, which ranges from R1.2 million to just under R4m. Sectional title units make up about 15 percent of the total.

Gilfillan says that a three-bedroom home which was sold recently for R2.4m was bought last year for R1.7m.

“Value increases of the size we have been seeing should, however, not deter those who have the resources from buying here and are prepared to wait patiently for opportunities. A radical increase in the interest rates, could slow down sales but we don’t believe this is likely to happen in the next year.”

Gilfillan says there is strong demand for rental properties, bolstered by a large student population. Two-bedroom homes in Observatory now rent at R8 000 a month or more and three-bedroom homes at R12 000. This Rawson franchise now manages more than 100 properties, but staff say they could find tenants for many more homes if stock was available.

Surprisingly, however, Gilfillan says that relatively few of Rawson Observatory’s buyers are buy-to-let investors.

Gilfillan says the main reasons for the ongoing demand in the area are its proximity to the city centre, UCT and Groote Schuur Hospital; the cosmopolitan appeal and large number of restaurants; attractive architecture, with many Victorian homes built between 1890 and 1920.

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