Cape Town’s buzzing home mar­ket ‘hold­ing its own’

Weekend Argus (Saturday Edition) - - PROPERTY -

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.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.