select
|

Now is the time for new development

The residential property market in Johannesburg is a bit like a hot air balloon tethered to the ground at the moment – and the only thing that can really set it free to fly is lots of new development.
 
“Sales volumes should be soaring as demand from buyers is huge,” says Lew Geffen, chairman of Sotheby’s International Realty in SA, “but there is shockingly little for them to buy, particularly in the upper sector, because existing homeowners are not upgrading and so not releasing stock into the market.
 
“This is especially true in the more established, central suburbs, where owners now often tell us they would much rather renovate or add to their current homes than buy a bigger or more luxurious property.”
 
At the same time, he says, the shortage of supply is causing a “price push” that is giving existing owners even less incentive to sell. “Prices are currently about 35% ahead of where they were after the 2008/09 recession and starting to move up even faster now, so many owners who bought in the past five years are happy to hang on now and watch their investment grow very nicely.
 
“In our own group, for example, we have seen the average home sale price rise by more than 14% in the past 12 months to R3,2m, following an 8% rise in the previous year.And yet we have buyers literally queuing up for anything that does come on to the market in these areas, which have come back into vogue in recent times as people have grown increasingly weary of long commutes to outlying suburbs and traffic congestion.”
 
In fact demand is such, Geffen says, that buyers are also currently pouncing on any new development that comes on to the market in a sought-after area, even though the homes in these developments generally come at a premium of about 30% compared to existing homes.
 
“Upmarket units in Johannesburg are currently selling at around R30 000/sqm, compared to around R18 000k/sqm five years ago, but buyers are scrambling to buy them off-plan and in many instances even before the project can be officially launched. We are also starting to see investors come in and buy two or three units at a time.”
 
This has certainly been the case, he says, at Le Cirque, a 450-unit super-luxury apartment development in Illovo which is already more than 60% sold out just a few weeks after being launched.
 
“Consequently I would like to say to developers that their time has clearly come again – and that those who are able to get new projects ready and out of the ground in the next three years are really going to be in the pound seats.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK