Luxury properties still selling well in East London

The demand for homes in the upper sector of East London's property market has remained steady in the face of the economic downturn - mostly thanks to the fact that many buyers in this sector have access to cash.

Consequently, says Colin Kuhlmann, principal of the local Chas Everitt International franchise, the prices of luxury homes in the city have also held up well, especially when compared to other coastal towns.

Wealthy buyers, he says, have been least affected by the credit crunch, in that they often have access to cash to pay sizeable deposits or even the whole purchase price. "They don't rely on bank finance as much as other buyers so prices in the higher brackets have not come under as much pressure as those in the middle and lower sectors of the market."

"Indeed, we are still achieving record prices despite the downturn, including those paid recently for two luxury properties on the Nahoon River.

"Development catering to this sector is also continuing apace, as evidenced by an exclusive R2bn golf estate due to be built along the Gonubie River by the Billion Group."

Meanwhile, Kuhlmann says, there is now really excellent value for money to be had by buyers in the lower sectors of the market, thanks to the fact that the banks have been declining up to 80% of bond applications in some areas and have thus put pressure on sellers to lower their prices in order to make a sale to those few who can qualify for loans.

"However, we are also seeing buyers become much more aware of the long-term growth aspect of properties rather than just price. They want to know that they will see a return on their investment, so issues such as security, noise levels, traffic, the value of surrounding properties, the distance to schools and access to other amenities are playing a greater role in the purchase decision. Design, flow and future maintenance are also emerging as important considerations".



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