The end of 2019 is here and reflecting on some of the highlights, it’s heartening to note that banks were lending up to 105% and aggressively competing for business - to this end the sentiment was that this was a bullish move by the banks and likely to have been based on a sense that the market had bottomed out and that there is confidence in a market comeback in the future.
This is according to Mike Greeff, CEO of Greeff Christie’s International Real Estate, who says the repo rate was decreased and remained there, which the industry welcomed, sentiment improved post-election, and Greeff Christie’s International Real Estate experienced a significant uptick in buyer activity.
“Currently there is a noticeable increase in buyer interest and this has been the case following the Rugby World Cup win. These positive events of national significance appear to impact on those with liquidity, particularly in the R5 million-plus sector, and there are a significant number of buyers out there who do fall into that category. It’s often something positive that provides the tipping point to make a decision and buy property. People really do want to believe in a future in South Africa and particularly in the Western Cape,” says Greeff.
He says the market shifted into a definite buyer’s market. This means that moving into 2020, sellers need to be educated on pricing to sell, and more than ever, it’s important to have an expert property professional ensuring that your property is competitive by being optimally positioned both pricewise and with the most effective marketing strategy.
“In terms of overall sales figures, we held our own, but particular areas are showing promise and are very likely to continue to do so in 2020,” says Greeff. He adds that the South Peninsula sales volume is up 10% up on the previous year and has surpassed the full 2017 year sales volume (this was a better year than 2018, when volumes dropped.)
“This is encouraging in what is otherwise a rather flat market. What we have seen in the region is some increased market activity and a moderately decreasing listing time, the difference between asking price and realised price is also narrowing from its widest at 12% to 9%.”
He explains that the primary reason for the increased sales volume is predominantly as a result of a liquid market, and this has come about because sellers are not in a position to hold out for the possibility of a market recovery, they are being forced to transact, and so properties are being brought to market at the appropriate price.
Greeff cites the rehabilitation of the Kommetjie Road and Ou Kaapse Weg intersection as having made things difficult with the traffic congestion and says this has had a negative impact on property sales in both Kommetjie and Scarborough.
“The roadworks are, however, nearing completion and the traffic congestion will be a thing of the past by the end of the first quarter 2020, and it would appear that the consumer is now prepared to explore the possibility of making one of these villages home.”
The establishment of the Generations School campus at Imhoff Farm has made Kommetjie and Scarborough a resident homeowner’s destination, where previously these villages had a large percentage of non-resident owners, or weekenders as they were referred to, but now with a world-class school on the doorstep, it makes it easy to live in the area.
“With all these developments, we are expecting the market to be more buoyant in 2020 as uncertainty is dealt with. Property on the South Peninsula is a finite resource which means that the current stock position can be reversed very quickly, and with the region offering upcountry buyers arguably the best value in the greater Cape Town area, we are looking forward to the road to recovery,” says Greeff.
Another area expecting growth is Constantia, particularly with the recent construction and grand opening of The Constantia Emporium on Ladies Mile Road.
“We expect to see new residential development on this site,” says Greeff, which he adds will widen the current offerings in the area.
Kenilworth Upper and Claremont Upper continue to be sought after in that they offer centrality to business hubs, easy access to schools and to the Jammie Shuttle. There is a constant demand for family homes in the Southern Suburbs in general, as this is where the lion’s share of schools are situated.
“More recently we are seeing growth on the Western Seaboard in Brooklyn where, according to Propstats, the average selling price increased from R843 889 in the period December 2017 to Dec 2018 to R1 029 375 in the past twelve months. The differential between asking price and selling price dropped to 4.9% from 10% and days listed from 74 to 57,” he says.
“The appeal, apart from affordability lies in the location which is close to beaches and within easy access to the growing and popular business hub of Century City. A MyCiTi bus makes travelling to the Cape Town City and the V&A Waterfront convenient too.”
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