But not everyone is running for cover. Industry veterans Ronald Ennik and Jan le Roux are using the downturn to grow Leapfrog Property Group’s market share in Gauteng, particularly in suburbs where luxury abodes would typically sell for anything from R5m to R50m.
Newly established Ennik Estates, a member of Leapfrog, has scored a major coup by bagging an affiliation with London-based Christie’s International Real Estate — only the second SA agency besides Western Cape-based Greeff Properties to do so.
Ennik says the new venture will be the only real estate player in Gauteng that focuses exclusively on the luxury housing market. Though established brands including the likes of Pam Golding Properties, Lew Geffen Sotheby’s International and Vered Estates also operate in the leafy suburbs, Ennik believes the needs of high net worth buyers and sellers are not yet serviced adequately. He says most estate agents will market properties in any price bracket — they generally can’t afford not to. “So the key differentiating factor between us and the competition is that we are not a one-shoe-fits-all operation.’’
Some believe that Gauteng’s big-ticket housing market is too small to sustain a niche, upper-end player. Ennik begs to differ. “Our research shows that close to R3bn in property sales priced above R5m were concluded in Gauteng in the 14 months to end-February 2011. That’s not insubstantial.’’
However, Ennik concedes the entry of a specialist agency would have been difficult without the backing of Leapfrog’s well-established referral network. “Key to our success will undoubtedly be the fact we have a two-brand strategy.’’
Besides, Ennik believes there is renewed appetite for trophy properties among wealthy buyers — local and international — looking to divert money away from volatile stock markets.
New data from Absa seems to support Ennik’s view. The bank’s luxury house price index, which tracks sales priced between R3,5m and R12,8m, was up 2,5% in the second quarter of 2011 compared with growth of only 0,1% for the middle market.
