Weekend Argus (Saturday Edition)
Seller’s market as values keep going up
Weak rand, lower inflation outlook fuels buying frenzy on the Atlantic seaboard
BUOYED by the weak rand and lower inflation outlook, buyers have over the past summer hedg e d t hei r b e t s o n t he Atlantic seaboard, snapping up 57 percent more property compared to the December to February 2014 period, according to Ian Slot, Seeff ’ s managing director for the area.
“Sales recorded by Propstats for the total market amounted to about R1.5 billion (199 units) compared to R958 million over the previous summer period.
“Unpacking the summer sales data, we note that aside from brisk local and foreign buying, demand was boosted by no less than 14 sales of properties at more than R20m worth almost R590m,” says Slot.
“February was t he best month, accounting for sales at just over R601m, up by 73 percent year on year from R348m last February and includes seven sales above R20m.
“Top-end prices are also edging ever higher. Where a few years ago, a property sold for R20m made headline news, homes are now selling for well above R30m to R40m.”
Two sales have also just breached the R100 000/m mark – a 300m2 flat in Heronwater, Clifton, that was sold for R36m at R120 000/m and two adjacent units of 4 6 8 m2 i n t he new Amalfi development on Beach Road in Mouille Point that were sold to Nigerian buyers for R78m at R166 667/m
The average sale price in February f or t he Atlantic seaboard as a whole now stands at R9.4m, which is 59 percent more t han l a s t February, largely as a result of stronger demand for higher valued properties, says Slot.
Meanwhile sales to foreigners over the summer amounted to R402m for 34 units, which is more than double the R197m paid for 26 properties the previous summer.
“Almost across the board, the market fundamentals have shifted into positive territory. Demand, sales and prices are up, whereas the number of days on the market and stock levels are down,” says Slot.
“Properties now comfort- ably sell within a week to three months on average and buyers are paying ever higher prices. The tight inventory levels have also resulted in the number of s how days being down by almost a quarter, from 189 last year February to 146.
“There is just so much land and property to go around in this area, so values just keep going up, despite the fact that we are effectively still in a depressed economy.
“Although we are concerned about the impact that the raising of transfer duty on sales of properties over R2.25m might have, we expect it to be short lived and for the market to absorb this. With a cruise terminal on the cards for the V&A Waterfront area and serious talk about a Grand Prix circuit f o r Cape Town, we doubt whether buyers of luxury properties will be deterred for too long. Buyers are likely to continue investing in this premier real estate belt that has stood the test of time better than most other residential areas in the country,” says Slot.