The slowdown wreaked on the national property market partly from last June’s introduction of the sobering National Credit Act appears to have been less brutal in Johannesburg’s Sandton in terms of culling sales than most other parts of the country.
Certainly, Sandton’s average selling price has dipped by between eight to twelve percent in the first four months of the year, but unit sales, according to one of the leading real estate principals, have actually increased by the same margin hugely underpinned by equity supported home loans and outright cash driven activity.
Glenn Norton, broker owner of RE/MAX Masters, reports a substantial increase in the number of sales involving deposits and cash purchases. “About 18 to 24 months ago the majority of transactions were driven by 90 to 108 percent loans to the value of the property, but now the trend is substantially toward equity supported sales.”
Norton says cash sales are being directed mainly in the R2,5m to R7m price channel while equity backed deals are focussed on the R1,2m to R3m asking price. Below R1,2m the 100 percent bond transactions still dominate. Most popular areas of activity are Paulshof and Sunningdale in the price range of R800 000 to R2m. Bryanston, which Norton, a 19-year sales veteran of the area, brands as “an area where buyers can never make a mistake”, such is its range of facilities and good access points. This, in spite of the slowdown in the suburb’s trend to sub-divide its traditi--onal large stands due mainly to Eskom’s inability to meet new power demands.
Further factors pumping the generally good activity came from sellers coming to terms with market adjustment after holding firm in the last half of 2007 for inflated prices, now biting the bullet on asking price and negotiation. Market stimulation has also come from bargain hunters quick to respond to good opportunities afforded by falling prices and investors getting better returns on rentals.
Norton notes a marked slowdown in new residential developments caused by general shortage of land availability, the inherent dangers of new units to compete on price with second hand homes and local authorities inability to put new infrastructure in place. The deceleration in new unit delivery, which he sees only, returning to normal in the second quarter of next year, should help in arresting the current oversupply.
Eskom’s decision to suspend load shedding and the trend toward installation of domestic generators has helped restore some property market confidence, which dipped to its lowest in January. A further factor was that of publicity given to similar power shortages in other developing countries proving that South African’s power supply woes were not in international isolation.
Norton estimates about one in seven new home listings are purportedly emigration driven, but says that even when sold not all sellers fulfil their original intention of leaving.