W Cape residential property sector grows

ALTHOUGH South Africa’s property market declined in the second quarter of this year, the Western Cape’s residential property sector grew significantly, thanks to migration from upcountry, says the Pam Golding Properties area manager.

Basil Moraitis said experienced property agents who carefully managed buyer and seller expectations would become even more important as the economy showed signs of weakening in the second quarter.

He said the property market’s deceleration was partly a result of the uncertain economic and political climate, but also of the typical seasonal slowdown at this time of the year, when fewer properties came to market.

Moraitis said well-performing areas such as the Atlantic seaboard – which according to the FNB Property Barometer reported a 33.9%year-on-year house price growth for the first quarter of this year – looked set to remain resilient to seasonal challenges if buyer and seller expectations were properly managed.

“There is no doubt that the Cape property market, and more particularly the Atlantic seaboard, has benefited significantly from unprecedented levels of migration from north to south over the past four years.

“The effect of this unrelenting demand has been unprecedented and sustained growth, with many instances of properties doubling in value over that period.”

But he said with cautionary sentiment evident in the national economy, buyers were now questioning this value offering and there had been a recent slowdown in transactions in the area.

“We are now finding agents need to carefully manage purchasers’ and sellers’ expectations to successfully conclude sales.”

Moraitis said on the Atlantic seaboard, the average variance from listing to selling price for June had increased from 8% below asking price in the first few months of the year to 16% below listing price in June.

“There will always be unique, top-end exceptional properties that command a premium as they are one-off trophy properties and less subject to the vagaries of everyday pricing trends.”

According to the latest FNB Property Barometer, Cape Town was still the top performing metro in terms of house price growth.