Sales sizzle as summer approaches – but stock is scarce

If sales for the 3rd quarter of this year are anything to go by, the Cape Town property market could be set to sizzle this summer.   

The latest Propstats figures show a healthy increase in residential sales for the third quarter on the Atlantic Seaboard, in the CBD and in the Southern Suburbs and Constantiaberg areas of the Western Cape, compared to sales in the third quarter of 2011.

“Buyer demand is strong, which should set the stage for a good summer season.  Unfortunately, with the best months of the year quickly approaching, at this point stock is scarce, particularly of properties priced below R5 million,” says Francois Venter, Director of Jawitz Properties.

Summer is typically the best time to sell property in Cape Town. The weather is warm, gardens are looking lovely, show days are well attended and buyers are feeling buoyant.

Sometimes, this leads to sellers increasing their prices; but Venter says that strategy won’t work this year.

“Buyers are still hunting for the so called bargain, which is acting as a dampener on prices,” says Venter.

“Normally when there is strong demand, and insufficient stock to meet it, property prices increase. But so far, that dynamic is not playing out and prices are essentially flat.  Despite this, some sellers are still holding out for unrealistic prices.  This could mean they miss the summer buying season, and result in fewer saleable properties on the market.”

Last quarter, the Southern Suburbs of Cape Town saw the most growth in sales, with 44 more properties sold than in the third quarter of last year. The Constantiaberg area saw the second highest growth, with 22 more properties sold, while the CBD saw 18 more sales, and the Atlantic Seaboard enjoyed an extra three sales.

However, for the year to date, the Atlantic Seaboard has seen strong sales, with 433 properties sold, at an average price of just under R3,9 million. In the CBD, a total of 369 properties have sold this year, with the average home priced at just over R1,8 million. The Constantiaberg area has seen a total of 387 sales, with the average home sold for just under R2,4 million, and coming out on tops the Southern Suburbs has had a total of 790 homes sold to date, with an average price of just under R1,8 million

“Sales figures could be even higher next quarter if stock levels increase.  The buyers are there.”

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