This is according to Arnold Maritz, Southern Suburbs co-principal for Lew Geffen Sotheby’s International Realty, who says: “Sales are down by about 20% from the same period last year (January to August), however, the average selling price is up by 4.63% across the board.
“This is a notable outcome when one considers that Propstats data reveals a remarkable 50.4% (R1 295 365 9590 drop in sales across the Peninsual in April after the March 30 cabinet reshuffle which included the axing of Pravin Gordhan.”
Maritz adds that other factors affecting sales volumes have been hesitation by both buyers and sellers to make decisions, especially before the upcoming ANC Conference, as well as the decline in upcountry buyers this year.
“We have heard anecdotal evidence from our colleagues in Johannesburg that sellers are having difficulty achieving their asking prices in most areas and, as a consequence, are staying put, or alternatively emigrating if they can afford to.”
Citing CMAInfo freehold sales data, Maritz says that the largest percentage drop in volume of sales were seen in Constantia (36%) and Pinelands (35%), followed by Plumstead and Kirstenhof (both at 28%). Rondebosch and Claremont volumes were only down 13% and 10% respectively, while Observatory was up by 8%.
“This decline in demand has not been more pronounced in the upper segments of the market as one might expect because it has been balanced to some extent by a somewhat persistent ‘limited’ supply of stock, which has ensured a slight upward trajectory in prices.
“The sectional title sector, however, has remained fairly solid, with only a 6% drop in sales volumes this year.”
Maritz says that despite the dip in sales volumes, there were price increases across the board, with the highest being Constantia and Kirstenhof with both showing an increase in median price of just above 15%. In Claremont and Tokai median prices rose by a little more than 4% while the lowest annual increase was 3% in Rondebosch.
Lew Geffen, Chairman of Lew Geffen Sotheby’s International Realty says that another direct effect of the subdued market this year was an increase in the length of time homes in the Southern Suburbs remained on the market.
“CMAInfo statistics show that the time it took to sell homes has increased by 22%, but this varied quite widely from suburb to suburb, with Tokai jumping from an average of just 31 days last year to 78 days while in Bishopscourt the figure reduced from 119 days to 112 days.
“We have also seen a steady decline in the number of buyers, with a 40% reduction between the last quarter of 2016 and the same period this year.”
And whilst there has been a fair amount of development marketing activity taking place in the Southern Suburbs, sales have also been negatively impacted by the sluggish economy.
“Pricing is critical, as is the reputation of the developer,” says Maritz. “There have been some developments that have sold out when the right balance was achieved, as well as a few projects that have stagnated somewhat, largely due to lack of investor appetite and possible over-pricing.”
So, while it’s definitely not all doom and gloom in the Southern Suburbs, like the rest of the country the real estate market here also seems to be holding its breath in anticipation of the outcome of the new ANC leadership.
Maritz concludes: “A pro-investment and pro-business candidate could blow new life into the economy as a whole, and real estate would benefit significantly from this. The opposite would be true of a candidate who does not inspire hope of a turnaround in the crippling corruption and mismanagement, especially if it leads to further credit rating downgrades.
“Therefore, what happens in December will inevitably influence the volume of real estate sales in 2018, as well as the growth of property values, and history has shown that there will always be opportunity for astute investors.”
