City property best in SA
THE Cape Town housing market was one of the few to show double-digit growth rates this year, with house prices in the Mother City up by 10.1 percent, some 4 percentage points higher than the national average.
Andrew Golding, chief executive of Pam Golding Property Group, said while growth in Cape Town had been solid, housing prices remained flat across the country as a whole, only increasing at one percent above inflation.
The Western Cape housing market was the best performer of all provinces, growing at a touch over 8 percent in the year to date.
Speaking at the estate agency’s head offices on Thursday, Golding said house price growth was unlikely to change much next year, unless the lacklustre economic growth rate improved.
This view was shared by FNB housing economist John Loos, who in the bank’s latest property barometer wrote there was “nothing on the horizon ... that looks likely to alter the fundamentals (of the market)”.
National house prices growth averaged 5.8 percent in the first 10 months of the year, down from last year, when it averaged 7.1 percent.
There were outlying areas, particularly locally, where Golding said things were different; prices of residential properties in the sought-after suburbs along the Atlantic seaboard increased by 25 percent.
There was also increasing demand for “secure lifestyle estates”, particularly close to towns such as Stellenbosch, Somerset West, Paarl and Wellington.
In Stellenbosch, there was again “huge demand for student accommodation”. “Apartments (are) snapped up by parents for children attending university as soon as they become available,” said Golding.
Rentals in the university town, which has 30 000 students, ranged from R12 500 to R15 000 for two-bedroom apartments – similar to, or even higher than comparable prices in the City Bowl.
Golding said the 25 percent growth rate along the Atlantic seaboard was in part the result of wealthy residents from Gauteng and KwaZulu- Natal moving to the Mother City.
New projects were in fact often marketed to Johannesburg buyers specifically.
For example, the first phase of the agency’s new Yacht Club development near the V&A Waterfront entrance was sold out to buyers in days.
When its second phase was launched on the Johannesburg market early last month, 60 percent of units sold on the first night.
Prices at the top-end development range from R45 000 and R60 000 per square metre.
These prices were still low when compared to similar affluent areas in cities such as New York or London, Golding pointed out.
In New York, luxury apartments cost an average of R189 000 a square metre, while those in sought-after boroughs of London, such as Chelsea, cost R250 000.
Golding said international interest for top-end Cape Town properties was muted, when compared to the period before the 2008 housing market crash.
In past 12 months, 3 percent of Pam Golding’s properties were sold to international buyers, down from 8 percent pre-2008.
He explained that foreign sentiment had soured following President Jacob Zuma’s announcement in February that foreign nationals would not be allowed to own land in South Africa.
While Zuma later clarified the restrictions applied only to agricultural land, not to residential property, he said the damage had already been done in the days between the announcement and clarification.
“The message got out the wrong way first,” Golding said.
But the Land Holdings Bill did have a silver lining.
Estate agencies had for the past 15 years been seeking clarity about whether the government would restrict house ownership.
With Zuma’s announcement, at least they knew where they stood, he said.
BUCKING TRENDS: Property prices along the Atlantic Seaboard have increased by 25 percent in the past 12 months.