According to the Lew Geffen, chairman of Sotheby’s International realty in South Africa, following a two-month “drought” earlier in the year, there has been a growing stream of buyers at the top end of the residential market since June, and that July was the company’s best sales month in three years.
“In our Johannesburg operations, the average sale price achieved has now increased from R2,2m to R2,6m, and we experienced a 40% increase in sales volume in July compared with the same month of 2010. What is more, there was not one cancellation, for the first time in my 40 years in the industry.”
He says that despite all the negative news from the world’s financial markets lately – or perhaps because of it – there is a growing awareness that this is an exceptional time to purchase property, and an increasing ability to act on this information thanks to an ongoing easing in bank lending conditions.
“But while there is a steady increase in activity levels in the lower market sectors, particularly among first-time buyers, it is the upmarket sector that is really leading the way, as evidenced by the fact that it is starting to experience some price gains.
“What is more, it seems that really big-ticket sales are also back on the board. A home in Morningside recently sold for R20m after an exceedingly long period in which there were no big-ticket sales in this neighbourhood. We also recently sold the late Aaron Searle’s home in Bishopscourt for a remarkable price and have just concluded a sale in Westcliff for well over R30m.”
Geffen notes that such purchases are important in the wider sense because the rest of the market often takes its cue – and its confidence - from upmarket buyers and especially high net worth and ultra-high net worth individuals, who are perceived as having an “inside track” on good investments.