Sales of luxury properties, so conspicuous by their general absence last year, have now definitely made a comeback in the Johannesburg market.
That's the word from Lew Geffen, chairman of Sotheby's International Realty in SA, who says the number of "big ticket" sales over R4m made by his Johannesburg offices over the past six months is 21% up on the number of such properties sold in the first half of last year.
"And much of the additional activity has taken place in the past couple of months, which have seen the especially notable sales of a property in Bryanston for R50m and another in Sandhurst for R35m.
"We have also seen a 45% increase in the total value of luxury properties sold over the past six months, compared with the same period of 2008, with the average unit price in this category rising from R5,94m to R7,14m."
Even better news, Geffen says, is that the recent surge in big ticket sales can mostly be ascribed to those shrewd buyers "who are always the first to see a good opportunity and are comfortable that the market is currently at or near the bottom and will start to turn upwards within a few months."
Sales at the top end of the market, he notes, are usually not directly related to a decline in interest rates such as seen since December, but rather a function of improving economic sentiment. "Many big ticket purchases are made with cash, so buyers don't really have to worry about home loan interest rates. They tend to be much more influenced by an increase in business confidence and medium to long-term economic and employment prospects that will drive future housing demand.
"I have been through five previous recessions in the real estate business and have seen this type of buyer correctly anticipate the market recovery every time."
Indeed, he notes, this may already be getting under way in Johannesburg, with the overall sales volumes being logged by his offices currently 13 percent ahead of the volumes recorded at this time last year, and turnover up a whopping 58%.
"I am not suggesting, of course, that prices across the board will immediately start rising. The main reason why the market is stabilising and unit sales increasing is because prices have come down substantially and buyers are making an effort to get in near the bottom. Sellers who think the halcyon days are back again are mistaken as prices are likely to remain at these levels for some time to come."
SOTHEBY'S INTERNATIONAL REALTY