Western Cape - average house price up

Although number of sales for the first quarter of 2012 Western Cape were not quite as high as they were in the first quarter of 2011 (1672 as against 1704), the average house price was up - from R1,983,267 to R2,039,978.

Western Cape estate agents, says Annette Evans, Manager of the Western Cape branch of the Institute of Estate Agents of South Africa data processing division (PropStats) are always 'hungry' for figures that will show that the downturn is coming to an end and property values are rising.  She says, not yet in a position to give really cheering news on this score, but, although number of sales for the first quarter of 2012 Western Cape were not quite as high as they were in the first quarter of 2011 (1672 as against 1704), the average house price was up - from R1,983,267 to R2,039,978.

What is more, the April average price this year at R2,139,949 was the highest yet seen - and the April sales (517) were up on those of April 2011 (498).

"I do realise that these are relatively small improvements," said Evans, "but at the same time they point to an upward trend rather than the negative or stagnant trend that we saw during much of last year."

Dianne Brock, the General Manager of the Western Cape branch of the Institute of Estate Agents of South Africa, said that the likelihood of a debt repayment default and/or the rejection of austerity measures by Greece - with consequent dire effects on the entire Eurozone structure - cannot yet be discounted and, as in previous months, will have a dampening effect on the South African economy if and when that happens.

However, she said, in her view the April pick-up is significant and read in conjunction with the improving house sales data from the USA is also encouraging.

"It has been noticed that South Africa lags the USA housing market by nine to 12 months - so the pick-up now being experienced there should be a positive sign for us," she said.

Referring to the latest FNB survey, Brock said that the biggest improvement had been among first time home buyers who now comprise 25% of the total buyers and this is, to quote the FNB survey, "a good indicator" because that group is highly dependent on credit - and the National Credit Act credit restrictions are still listed by estate agents as the number one factor limiting a full-on recovery in the housing sector.

"FNB's survey reveals that 20% of sellers are selling to downscale due to financial pressure.  However, significantly, 17% are now selling to upgrade and it is encouraging to note that while downscaling figures are slowly decreasing the upscaling figure is rising.

This also, therefore, gives more reason for optimism, as does feedback from the industry indicating a small improvement regarding the availability of stock in relation to demand. Nationally the figure is now very close to the 50/50 level, indicating that by late 2012 or early 2013 demand should continue to improve and again be slightly in excess of supply. My advice to buyers therefore is that they should make a move now while prices and interest rates are still so favourable and not leave a decision until later."

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