Cash buyers set standard for residential property market stability in Western Cape

Just how recession-proof is the Western Cape’s property market?  Very, says Laurie Wener, MD of Pam Golding Properties (PGP) Western Cape Metro region.

Priced at R14.95 million through Pam Golding Properties, this elegant and spacious family home in Constantia Upper in Cape Town’s Southern Suburbs includes four en suite bedrooms, voluminous spaces, a cathedral-ceilinged art studio and state of the art security.

But, she cautions, everything is relative, so if it’s an economic wobble you’re looking at, the Cape’s going to weather it with a flourish. However, if the worst came to worst, Cape residential property would still, in all likelihood stay in the best possible shape as a tried and tested investment. And there’s no apparent melt-down on the horizon.
“The Cape largely dances to its own tune and it’s probably the one place in South Africa where people really want to live. It’s also not the place anyone leaves unless they have to. And the thing is, we continue to have high quality buyers across all price ranges.”
The statistics back her up, for instance, more than 50% of Pam Golding Properties’ buyers in this region right now, have cash to pay for their property across the price range. It’s not all about the telephone number transactions on the Golden Mile, or the headline-grabbing record sales to Bishopscourt billionaires.  Lower priced properties are also drawing cash offers.
“It’s solid all the way through,” says Wener, referring to some cash buyers of property in the middle to lower price range, who are investors diversifying their portfolios in the face of fluctuating stock market performance. Others are sellers of family homes making a cash buy of smaller properties as their needs change.
“Cash still has a lot of cachet, while banks have yet to throw caution to even the lightest breeze. So bonds are still an issue.”
Then there’s that much-mentioned seller’s market. In some categories, there aren’t even places for sale, let alone at a price you could call average.
“What might put the brakes on a bit, is buyers’ real reluctance to spend more than their instincts tell them is enough. There is still a difference between the asking and the selling price – we mustn’t lose sight of the hype based entirely on the numbers that sellers and their sometimes reluctant agents apply to homes that just don’t stand up to the extra million. Check the sales stats to get the real picture.”
According to the Pam Golding Residential Property Price Index, while the Cape’s performance over the past three years has been scintillating, it’s currently being outstripped by KwaZulu-Natal in some categories.
That could be a case of catch-up as the rest of the country feels the love, or that, for various reasons, nothing to do with fundamental value, the Cape has peaked a bit.
“But as long as we continue to have buyers with cash, we have stability – and that’s what makes a market resistant to negative pressure.
“What makes cash offers a stabilizing influence on the market is that they translate into clean deals with no suspensive clauses. In fact a cash offer very often spurs other interested buyers to raise their bid immediately because there’s no wiggle room while waiting to see if there’s a hitch at the bond stage.
“The bottom line is, good property will sell at a good price. The Cape is a fortunate place for sellers right now and for the future, whatever happens. But reason must always prevail when setting the price. This is a sophisticated market that buys with confidence but remains value conscious within the framework of prevailing market conditions,” says Wener.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Nov 2017
      Property valued at approximately R1 billion is on High Street Auctions’ sales floor during the month of November, including the much-anticipated sale of the Tshwane Mayoral Residence and the land occupied by one of South Africa’s oldest operating gold mines.
    • 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.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us