Cape Town’s buzzing home market ‘holding its own’
THE RESIDENTIAL property market in the Cape Town metropolitan area is holding its own, and estate agents are expecting a busy summer season.
Pam Golding Properties (PGP) says stock levels are beginning to rise in many areas due to new developments.
PGP’s managing director for the Western Cape metro area, Laurie Wener, said there was still enormous demand for family homes across all areas of the city, particularly in the R3.5 million to R8m price range.
“First- time buyer activity is q u i t e b r i s k i n s o me a r e a s , particularly in suburbs along the western seaboard, where you can still buy a flat for under R800 000 and a family home for under R1.5m. Although sales of luxury homes have been moderate, PGP has sold several from July to September. These include a R23.5m home in Constantia, which was sold to a UK buyer, and a R26.5m apartment in Clifton, sold to a buyer from west Africa.
“There are also increasing signs of fresh activity in residential developments, and a number of develop- ers are indicating that they are eager to re-enter the market with projects in various price categories.”
She said the sectional title market in the Atlantic seaboard, city bowl and southern suburbs was experiencing a flurry of activity.
“High demand is coupled with a shortage of stock, and this has boosted prices by around 20 percent over the past nine to 12 months. There are also indications that banks are beginning to take a broader view of granting mortgage finance.”
Yvonne Viljoen, property finance consultant with South Africa’s biggest bond originator ooba, agrees that banks appear to be easing their lending criteria.
“There are a number of indicators that demonstrate the banks’ improved inclination to extend credit for home loans. These include lower average deposit requirements, which are down by 21.2 percent year on year, as well as a slightly lower initial decline ratio – the proportion of bond applications that are rejected by the first lender applied to.
“That figure dropped 1.2 percent between August and September, to 47.2 percent. But of those applicants, 28.9 percent were successful when they applied to alternative institutions.”
She said banks now required up to 20 percent as a deposit.
“The average deposit paid by ooba’s successful home loan applicants in September this year was 14.1 percent of the purchase price. That’s down from close to 17.9 percent in September 2012.”
Viljoen and Wener were both confident of moderate price growth in the property market during the final quarter of 2013, and into next year.
SHIP SHAPE: The view from a three-bedroom apartment in Palgrave at the V&A Marina, for sale at R22 million.