Big ticket properties on the move again

The upper end of the property market is enjoying a sales surge as buyers who

have been hanging back for several months re-enter the market.

"In Johannesburg," says Lew Geffen, chairman of Sotheby's International

Realty South Africa, "there has been a definite shift recently in buyer

perceptions as sellers have become more willing to negotiate, and activity

at the top end of the market has picked up sharply as a result.

"Indeed, 45 percent of our turnover in August came from big-ticket sales of

more than R5m each, compared to a distinct dearth of such sales in June and

July."

Buyers at this level, he notes, are much less sensitive to small changes in

interest rates such as those implemented this year than to market entiment

- and their own assessment of value.

"Consequently, when they perceive properties to be overpriced and sellers to

be intransigent, they simply withdraw from the market. But by the same

token, when they see things changing, they are quick to jump back in and buy

what they want, almost irrespective of the interest rate at the time."

In addition, Geffen notes, buyers are increasingly not only aware of the

value that upmarket SA property offers in global terms, but also convinced

that it will show excellent growth as the country grows in world stature.

Most at this time, however, are not foreign investors but South African

owner-buyers.

"It is also interesting that most of our big-ticket buyers now are

purchasing existing properties in well-established areas with a view to

renovating or upgrading these homes as long-term residences.

"This is an encouraging trend in that it signals a growing commitment to SA

and hopefully, a slowdown in the high rate of emigration at the upper levels

of business."

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