Luxury property sector in Joburg follows Cape Town’s upward trend

The average home price in Johannesburg’s luxury property sector has risen by almost 13% in the past 12 months to approximately R2,6 million, Lew Geffen of Sotheby’s said in a statement.

He says the public attention has been focused on big-ticket sales on the Atlantic Seaboard and in the Southern Suburbs of Cape Town. A recent example is a sale of a property on the Atlantic seaboard of R200m.

“But actually this sector of the market in Johannesburg has been just as busy,” Geffen says.
“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.”

He says there have been quite a number of Johannesburg sales recently in the R30m to R40m range, but the highest demand has been for properties around the R6 million to R12 million mark.

“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.”

Geffen attributes this trend to wealthy South Africans who are now upgrading their homes to more luxurious properties. These individuals are also asking realistic prices for  their existing properties to ensure quick sales.

“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.”

 Geffen cautions that this trend should not be seen as a signal to raise 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.

“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.” 

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