Says Francois Venter, Director of Jawitz Properties: "While much of the comment on the residential property market has been negative, the figures show that more than R10.4 billion of properties was sold during 2011 in the major Cape Town metropolitan areas, only slightly down from 2010." In terms of volumes of transactions, there was little difference between last year and 2010.
By far the majority of sales in 2011 were under R3 million in value, the exception being the Atlantic Seaboard, an identical pattern to 2010. The Western Seaboard sold 208 more properties this year than last, and the highest number of properties overall, with the Southern Suburbs coming in second, a reversal of 2010 when the Southern Suburbs out-sold the Western Seaboard. Both areas enjoyed slight increases in the average sale price. In the False Bay area, more homes were sold in 2011 than in 2010, and the average number of listing days narrowed from 150 to 129. In both the Atlantic Seaboard and City Bowl, sales of sectional title properties strongly outperformed sales of freestanding properties both last year, and in 2010.
Venter says that prices on the Atlantic Seaboard held steady in comparison to 2010, but enjoyed little or no growth in nominal terms. Sectional title sales were particularly strong there, with 427 units being sold compared to 186 houses. "A striking trend in this area was the predominance of cash (62%) sales over bonded sales (38%), whereas the opposite was the case in the Northern Suburbs where 77% of sales were bonded sales and only 23% were cash sales." Overall, about 40% of properties in the major areas are bought with cash, particularly in the more affluent areas, reflecting the confidence of cash buyers in property as a long-term investment.
The largest difference between asking and selling prices was -14.5% for the Atlantic Seaboard, followed by -13% for the Constantiaberg area, -11.7% for the City Bowl, and -10.5% for False Bay. The best performer was the Northern Suburbs, where the difference was only -7.2%, followed closely by the Western Seaboard's -7.5%.
"This isn't surprising, given that areas like the Atlantic Seaboard and the Southern Suburbs include some of the more affluent suburbs of Cape Town, such as Camps Bay and Constantia," says Venter. "Our experience is that many sellers in these areas are reluctant to accept that prices have softened since the heydays of the property boom." Prices declined by 4.4% in nominal terms year-on-year for the Constantiaberg area, and the average number of listing days increased from 80 days in 2010 to 91 days in 2011.
The Northern Suburbs enjoyed the shortest average number of listing days at 88 days, while sellers on the Atlantic Seaboard had to wait an average of 140 days before their properties sold. "Once again, the average number of listing days is closely related to the difference between asking and selling prices. Because sellers on the Atlantic Seaboard typically priced their properties an average of 14.5% above the market, their properties remained on the market for longer. Northern Suburbs sellers, on the other hand, priced their properties more realistically and sold them within an average of 88 listing days."
*This includes the Atlantic Seaboard, City Bowl, Constantiaberg, the Northern Suburbs, Southern Suburbs, the Western Seaboard and False Bay.