Jawitz Properties franchisee Harold Kolnik says that Joburg families, particularly with young children, are moving to the southern peninsula primarily to escape the high incidences of crime but also to pursue a better quality of life.
"Many are loath to actually leave the country given of the disadvantage of the weak rand against currencies in the United Kingdom, the States and Australia, not to mention the trauma of actual relocation. The Cape is a more comfortable option," he says.
However, he cautions, the equivalent of a R2m house in Joburg would fetch R5m in the Cape. Buyers have to be prepared to downscale and adjust to the local market.
First-time buyers are finding it more difficult to enter the market due to the deterioration in affordability. Lower income groups are experiencing more strain than those in the higher income brackets due to rampant price inflation and the effects of interest rates.
"Nevertheless, there's still good entry level value in areas such as Fish Hoek and Milkwood Park and Capri in Noordhoek – all of which are situated in a natural environment and close to the beach. A two-bedroom unit in a development in Fish Hoek would cost from R750k upwards and the average price of a stand-alone house starts at R950k, depending on the area," he says.
In the higher priced bracket, suburbs such as Simonstown, Scarborough and Misty Cliffs offer a fantastic lifestyle with good security. Certain properties in these areas are 15% to 20% down on what they were two and half years ago, so now is the time for a buyer to lock into a good bargain.
Kolnik says that there is no shortage of stock at present; but homes that are priced above R3m are taking up to five months to sell as opposed to two years ago when a property in this price bracket would sell within two months. The new municipal rates have made many holiday homes, that are marginally used, financially unviable. A number of these are now coming on to the market, many of which are priced at R3m and above.
Likewise, rental stock is being sold off as the interest rate bites and landlords find they can no longer subsidise the bond. So, for the first time in a while, rentals are harder to find and those that are available are snapped up.
Tighter security is being introduced in many of the newer developments such as De Goede Hoop and Klein Slangkop in Kommetjie.
"These areas are still poplar with overseas buyers, but we are noticing a definite slackening off of interest since the Polokwane convention in November. Whereas, a couple of years ago, 40% of properties bought would be from foreign buyers or expatiates returning.
"This has now dropped to about 20%. Foreigners are nervous about the political situation, the precarious power supply and the lack of infrastructure maintenance and are looking elsewhere to invest their money," he says.
For more information contact Harold Kolnik on 021 780 1401 or click here to visit the website.
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