Paradigm shift for Mitchell’s Plain and Strandfontein property

Stock shortages are currently holding up the property market in Mitchell’s Plain and Strandfontein, which recorded an excellent run in the second half of last year.
So says Astrid Smith-De Gruchy, owner of top local estate agency RealNet Select, who notes that the supply of “distressed” properties that were available through the banks and were a mainstay of the market last year has all but dried up.
"In 2012, we were receiving at least two such properties a month, but so far this year we haven’t had one. This is good news in the sense that it shows consumers are recovering financially from the effects of the recession and able to afford their bond repayments, but it also removes the surplus stock in the market which has mostly been coming from distressed owners for the past few years.”
However, while lack of stock usually leads to price increases, this is not currently the case, she says. "In spite of shortages, buyers here are just not prepared to pay prices they perceive as too high. And they are being supported in this by the banks, which are very conservative when evaluating properties.
“This is particularly relevant in our franchise area where around 90% of buyers, most of them first-time buyers, require 100% bonds. Prices are thus being governed by bank evaluations and what buyers are able or prepared to pay, rather than the historic supply and demand dynamic."
She adds that the owners of most homes that are currently for sale are either relocating or upgrading – not selling due to financial pressure. "And homes that are priced realistically usually sell within the first month. Sellers holding out for asking prices that are perceived as too high are not finding buyers and either have to lower their price or withdraw the property from the market. Strong demand is thus leading to quick sales - if the price is right - rather than to higher prices."
Prices in both areas are also governed to a greater degree by location rather than the size or amenities properties offer. Buyers have definite preferences and prices reflect this, she says.
Prices in the extended Mitchell’s Plain area start at about R160 000 and rise to about R550 000. Smith says that many sellers in Mitchell’s Plain upgrade to Strandfontein, where entry-level homes are priced at around R400 000. In rare instances, properties have reached selling prices of R900 000, but most top-end properties here sell at around the R750 000 mark.

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