‘No rea­son at all for gloom in SA res­i­den­tial mar­ket’

Weekend Argus (Saturday Edition) - - PROPERTY -

IS THE South African res­i­den­tial prop­erty mar­ket in dire straights, or is it ex­pe­ri­enc­ing a steady re­cov­ery with ex­cit­ing prospects ahead?

Those who at­tended the We s t e r n C a p e I n s t i t u t e o f E s t a t e Ag e n t s ’ e n d - o f - ye a r break­fast re­cently were told by Lan­ice Stew­ard, MD of Anne Porter Knight Frank, that the pes­simistic out­look is def­i­nitely not war­ranted.

Stew­ard ac­knowl­edged that in 2009/2010 the num­ber of South African es­tate agents had dropped from 95 000 to 36 000, and few re­cent years had been more dif­fi­cult than 2010.

But, she said, the in­sti­tute’s new PropS­tats di­vi­sion showed that year-on-year sales in the Western Cape had in­creased by about 56 per­cent – 3 924 for 2009 and 6 117 for 2010.

“These fig­ures are, ad­mitt e d l y, n o t c o m p r e h e n s i v e be­cause the new di­vi­sion was cap­tur­ing less data in early 2009 than it is now. But even if you al­low for a 50 per­cent cut to re­flect this, the 28 per­cent in­crease would be a ma­jor achieve­ment in any anal­y­sis.”

She said the pes­simism prob­a­bly stemmed largely from data re­vealed by ma­jor banks in­di­cat­ing that nom­i­nal av­er­age prices had been de­clin­ing for about six months.

“It should be re­mem­bered that the high point they achieved be­fore the down­turn be­gan in 2008 was ex­cep­tion­ally high – so much so that even then econ­o­mists were ask­ing if it was sus­tain­able.”

She said PropS­tats’ data for t h e We s t e r n C a p e a l r e a d y showed a rise in an­nual sales from R7.8 bil­lion to R12.5bn. Again, even al­low­ing a big dis­count for growth in PropS­tats’ data cap­tur­ing, the fig­ure was “very im­pres­sive”.

“Par­tic­u­larly en­cour­ag­ing has been fast, con­tin­ual growth in the prices recorded by FNB in Khayelit­sha and Gugulethu – 29.7 per­cent in 2007, 18.7 per­cent in 2008 and 14.2 per­cent in 2009 – fig­ures prob­a­bly matched in other big Cape town­ships.”

Stew­ard war ned sell­ers against over-pric­ing.

“The World Cup killed the res­i­den­tial hous­ing mar­ket for two or three months, but it can be hoped that it will lead to a big in­flux in tourism and for­eign in­vest­ment over the next two years, to the ben­e­fit of the hous­ing mar­ket.”

Stew­ard sug­gested the prop­erty mar­ket could be boosted by South Africans re­turn­ing from Bri­tain as a re­sult of the UK’s eco­nomic dif­fi­cul­ties and its clam­p­down on em­ploy­ment of for­eign­ers. The three per­cent growth rate likely in South Africa in the com­ing year was also an at­trac­tion.

“Cape Town still rep­re­sents some of the most de­sir­able prop­erty in the world, and the prop­erty in­dus­try here can look for­ward to sus­tained growth in the com­ing years.”

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