Atlantic Seaboard rides a wave of sales
News > news - 05 Jan 2010

It's been a rip-roaring past few months for estate agents working in Cape Town's Atlantic Seaboard suburbs, with buyers flocking to take advantage of good pricing and sales figures rocketing.

"We've literally gone straight from famine to feast," says Rob Stefanutto, principal of Sotheby's International Realty Atlantic Seaboard. "Indeed, our turnover in the third quarter of 2009 was equivalent to that in the whole of the previous year and the months since then have been equally busy - even December, which is traditionally quite a quiet month for us."

Most buyers in this period, he says, have been from Gauteng, although sales have also been made to British, Israeli, German, French and Italian investors.

The most popular purchases have been apartments and smaller townhouses and available stock of such properties has diminished to such an extent that they are now selling very competitively at just 5 or 6 percent below asking price, while new developments are being snapped up, mostly by Gauteng buyers.

However it's interesting, says Stefanutto, that neither price nor the prospect of rental demand during the Soccer World Cup has been the primary motivator in many of these purchase decisions. "Rather, it's often a case of just wanting to own property on the Atlantic Seaboard because it is one of the world's most desirable locations.

"And many recent buyers have told us that they saw the property downturn and the ensuing drop in prices as their chance to do just that, then waited until it bottomed out before jumping in, believing as we do that the area is bound to be one of the best performers in the next property upturn. In fact, many are already exhibiting their faith in the market by upgrading their properties extensively."

At the top end of the market, however, price is still playing an important role, Stefanutto says, with buyers delighted to find that many sellers are willing to consider offers well below list price just to get the deal done.

"This price flexibility is mostly coming from foreign owners who bought when the rand was 12 to the dollar and still stand to make a 40 to 50 percent gain now that the rand is stronger, even if they lower their asking price.

"Most are looking to liquidate capital to refinance businesses abroad or simply to pay off debt, but whatever the reason, big ticket buyers have not been slow to spot the opportunity, which in many cases means that they do not need to gear their purchases more than 70 percent and can thus obtain finance relatively easily. This is a very important factor in the current buoyancy of our market."

ISSUED BY

SOTHEBY'S INTERNATIONAL REALTY

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