select
|

Property markets can turn on a dime

While the volume of sales was down in a number of Cape Town suburbs for the first half of the year compared to 2014, the value of sales increased slightly. However, sellers should not become complacent that property values will continue to spiral upwards indefinitely, says Francois Venter, Director of Jawitz Properties.

“For some time now it has been a seller’s market, with the lack of stock enabling sellers to push up prices. However, the property market can turn on a dime, and there are clear signs that buyer demand is slowing,” Venter says.

An exception for the moment is the Atlantic Seaboard, where the number of properties that changed hands in the first half of 2015 was down by 4%, according to PropStats.  However, the value of those sales increased by 12% overall. This was because the average price of properties sold increased by 17% from R5.9 million in 2014, to around R7 million.

The same pattern could not be seen, however, in the City Bowl where the number of sales went down by 23% and the value of sales went down by 17%, despite a 7% increase in the average price.

In the Southern Suburbs, volumes were down by 11% but values were marginally up by 1% compared to 2014, though average prices went up by 11%. 

“With the exception of the Atlantic Seaboard, where values continue to be buoyant for now, the signs are there that the momentum is shifting, which means sellers should consider how they price their properties quite carefully,” says Venter. “Simply hanging on indefinitely for a higher price is no longer a viable strategy,” he says.

In the City Bowl, values were down in nine out of 12 suburbs, the exceptions being De Waterkant, Higgovale and Zonnebloem, where there was an upsurge of sales. In the ever popular Southern Suburbs values were down in five out of 17 suburbs. 

“Going forward, we believe that property prices won’t continue to grow aggressively and that buyer demand will ease,” says Venter.

“This is because buyer income has not kept up with the rise in property prices, which grew above inflation, so there is a slowdown in affordability, coupled with rising costs, slow economic growth and a rising interest rate cycle.”

In fact, Venter wouldn’t be surprised to see the supply situation start to normalise as the balance between supply and demand starts to change.  

“Property will always be a good investment and prices will no doubt continue their upward trend over the long term.  But in the short term serious sellers should ensure their properties are priced in accordance with market conditions and what buyers are prepared to pay,” Venter concludes.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 20 Feb 2018
      A major shift in the ageing paradigm has precipitated an equally dramatic transformation in the retirement sector, with modern accommodation options worlds away from the conventional model.
    • 19 Feb 2018
      Possibly one of the biggest sources of contention between landlords and tenants surrounds the rental deposit. “Most tenants rely on getting their rental deposits back when moving, so that they can use it to pay a deposit on their new home. Having it withheld or even having large amounts deducted can lead to a lot of distress,” explains Bruce Swain, CEO of Leapfrog Property Group.
    • 19 Feb 2018
      Situated approximately halfway between Johannesburg and Pretoria, Midrand was established in 1981 and forms part of the City of Johannesburg Metropolitan Municipality. It has become one of the major business hubs in the country with major pharmaceutical, textile, telecommunication and motoring giants situated within its boundaries.
    • 19 Feb 2018
      The PayProp Rental Index Annual Review of 2017 shows that the rental market suffered from much volatility during the year. It kicked off with rental growth spiking in January with weighted year-on-year growth (YoY) growth peaking at 8.3% before dropping to 6.34% in July, dipping down to less than 5% in November and then experiencing a slight uptick at 5.75% in December.
    • 19 Feb 2018
      While most homes in cluster complexes, estates and other gated communities come with at least one garage or carport, residents would often like additional permanent parking or storage areas for things like trailers, bikes, boats and caravans.
    • 16 Feb 2018
      Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
    • 15 Feb 2018
      One positive consequence of the financial crash in 2008 was the rise in consumerism, especially in the property market, where buyers have steadily become more knowledgeable and more value conscious.
    • 15 Feb 2018
      While most homeowners will take the agent’s commission into consideration when they are trying to determine what the will get out from the sale of their property, many often forget to factor in the other costs involved in a home sale, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
        
    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