Big-ticket property fire spreads to Johannesburg

The average home price in Johannesburg’s luxury property sector has risen by almost 13% in the past 12 months to R2,6 million, on the back of strongly increasing demand. 

That’s the word from Lew Geffen, chairman of Sotheby’s International Realty in SA, which specialises in high-end property sales. “For the past few months, public attention has been focused on big-ticket sales on the Atlantic Seaboard and in the Southern Suburbs of Cape Town -with a recent bumper sale on the Atlnatic Seaboard taking place at R200 million - but actually this sector of the market in Johannesburg has been just as busy.

“The number of luxury property sales has been climbing steadily in the past six months and in February,sales volumes were 8% up year-on-year, with most of the activity taking place in upmarket suburbs such as Sandhurst, Atholl, Inanda, Hyde Park, Bryanston,Westcliff and Melrose.

“There have been quite a number of Johannesburg sales recently in the R30 million to R40 million range, but the highest demand has been for properties in the R6 million to R12 million range, which currently account for about 30% of the properties we are selling.

“In addition, we have also seen the average home sale price in Parkhurst, for example, leap from about R2 million a year ago to around R2,5m- plus now, and a flurry of sales at prices between R4 million and R13 million in the Morningside market, which had been moribund for almost four years.”

Currently most high-end buyers, Geffen says, are well-to-do South Africans who have decided that now is the time to upgrade from their existing homes to more luxurious properties – “and have in many cases decided to pitch their own asking prices at levels that will enable them to sell quickly and get on with their plans.”

Indeed it is this readiness to sell, he says, that has really set the luxury sector alight again. “When the recession hit in 2009, most wealthy homeowners simply withdrew from the market to wait for better times – and better prices. Largely unaffected by the credit crunch, they were not in a position where they needed to sell, and they also did not want to lose out on their investments as overall property prices plummeted, so sales in this sector of the market essentially dried up because of a lack of stock.

“In the past few months, however, high-net-worth individuals in SA, as all over the world, have awakened from their ‘slumber’ and re-entered both the stock market and the property market en masse. Their equity in their existing properties has grown and the economy and property prices have also recovered since 2009 to the point where they don’t have to take a losson their initial investment when they sell, and they are seizing the opportunity to buy even more valuable properties while these are also still available at reasonable prices.”

However, Geffen cautions, there is still quite a way to go before this sector of the market gets back to normal trading volumes,so homeowners who are contemplating an upgrade should be careful not to read the recent additional activity as a signal to raise their price expectations again. “It is important to note that the average price increases we are seeing now are coming after a long period in which luxury home prices essentially remained static because there were so few sales taking place.

“In other words, we are still working off a low base and sellers need to focus,not the potential for raising their own asking prices, but on the unusually favourable upgrading opportunities this situation is creating, and how to make the most of them.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us