Optimal time to sell as average house price growth starts to slow down

Research shows that the Western Cape outstrips other provinces when it comes to growth in the average selling prices of property, says Mike Greeff, chief executive of Greeff Properties an affiliate of Christie’s International Real Estate.

“According to FNB Western Cape House Price Index, house prices in the Western Cape grew 7.7 percent year-on-year compared to the national average of 5.2 percent.

“There has been phenomenal growth over the past 12 months in particular, with record prices being fetched in several areas, for instance, Constantiaberg, southern suburbs and False Bay have performed particularly strongly,” says Greeff.

He says that average selling prices recorded by Propstats in the Constantiaberg region, across the board for all property types from June 2013 to June 2014 increased by 7 percent compared to the preceding 12 months. However, from June 2014 to June 2015, the average selling price grew by 19 percent.

“A similar trend is reflected in the Propstats southern suburbs figures, which show a growth of 13 percent when comparing the June 2013 to June 2014 period to the June 2012 to June 2013, but a significantly higher growth in the average selling price by 24 percent over the most recent 12 months,” says Greeff.

“The average selling price growth in False Bay has also been “stellar” in spite of the recorded drop by Propstats to a 23 percent increase in the average selling price over the past 12 months compared to a 30 percent increase in the average year-on year selling price recorded for the June 2013 to 2014 period.

“These figures are indicative of trends and the predominant indicator is one of strong consumer confidence in the province,” says Greeff. “While average house-price growth has been exciting and significant, economists such as John Loos are predicting that we are poised on the brink of new phase which is the start of an inevitable long-term super cycle correction.

“This is not something to be feared, but rather information to be used to help make significant economic decisions or choices. We are likely to see average selling price growth leveling out somewhat, so those waiting for prices to rise even further before they sell might factor this information into their strategy and look to sell within the next six months, particularly since demand for property in the Western Cape remains high,” says Greeff.

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