These occurred at:
· 63 Dennekamp. This 170 sqm unit sold for R2 200 000.
· 5 The Carragh. This 70 sqm unit sold for R2 700 000
· 6 Greenfields. This 153 sqm unit sold for R3 350 000
The average time on market for these properties was 93 days. The prevailing average price per square metre in respect of these sales is R20 992.37.
Of interest is that the sales recorded for June & July 2017 number seven. Of more relevance however is that the average price paid per square over the same period last year is over R 24 824.00.
The average time taken to sell these three properties last year was 11 days.
The average sale price, per square metre has therefore dropped, year on year, by just on 15%.
Of further interest is the variable between listing price and ultimate sale price:
· June/July 2017 5.1%
· June/July 2018 12.4%
Naturally, one must be careful not to compare apples with pears. Size, condition and location of the properties that sold a year ago are variables that cannot be ignored. Nevertheless (and making these allowances), it is clear that properties are selling for less (and taking much longer to sell) in the current market.
The rental market has been similarly affected it being recently reported that rentals in the Southern Suburbs and dropped by 20% when compared to the same period last year.
This factor impacts directly on the sectional title sales market. A significant source of buyers has always been the investor buyer – the buyer who maintains a portfolio of apartments and rents them out thereby deriving an income.
Three factors seem to be at play that has seen the investor buyer-pool largely withdraw from the market for the time being:
· Diminished rental return.
· Anxiety over owning multiple properties in the context of the land expropriation debate.
· Price.
RENTAL RETURN
Whilst it is so that rentals have dropped, the same media report that rental returns in the Western Cape (and notably the Southern Suburbs) remain head and shoulders above those achieved in the rest of the country. For the investor buyer however, the defining element in the return on investment equation is purchase price as it will ultimately determine the viability of a property when assessed in terms of a projected (lesser) rental income.
THE LAND DEBATE
It has been recently announced that the process of amending our Constitution so as to permit the expropriation of land without compensation is to proceed.
My opinion is that unequivocally defining the parameters of this emotive issue is to be welcomed and frankly, the sooner this is achieved, the better.
At present there is nothing but uncertainty, popularist rhetoric and noisy, electioneering posturing.
It is the uncertainties, anxieties and alarmist speculations that impact heavily upon the property market.
I have no doubt that we shall see increased buoyancy in the market as soon as it is set out is plain terms what precisely land expropriation shall entail.
My firm belief is that the buyer confidence in the market shall be restored once the fair and reasonable redistribution of appropriate land is defined in terms of an implementation programme that confirms and entrenches the right to own property.
PRICE
As with rentals, properties are selling for less. There is an oversupply of stock and demand is lack luster.
Ultimately it is the market that attributes a value to a property. Our duty, as agents is to solicit the best offer that market is prepared to pay.
When assessing a property therefore, it is critical to assess it in terms of the prevailing market context – the market with which our seller has elected to engage.
In recent years, particularly since 2014, property values in the Kenilworth Upper sectional title market have increased exponentially. Demand for such properties exceeded supply and sales, across the board, were concluded in unprecedented amounts.
While sale figures may have flattened we remain (like the rental market) one of the most expensive areas in the country in which to buy property and sellers continue to achieve a strong return on their initial investment.
One must consider whether sale prices would have adjusted anyway – without the market disruptor that is the land debate.
One must ask whether the Western Cape, viz a viz the rest of the country has simply become unaffordable, whether our market has reached the apex of the upward trajectory that we have enjoyed for many years and whether our market has ‘overheated’.
Given our (recovering) water crisis, a tarnished perception of local government leadership and general political anxieties we must ask whether the Western Cape has lost some of the appeal of which we could previously boast.
Those who have worked in the property industry for many years know that the market condition is a cyclical being and that the market passes through periods such as the one we presently experience.
The current market may not be what it was but we come off a very high base and the Kenilworth Upper sectional title market remains active.
A property will sell in any market as long as it is priced correctly.
My firm belief is that buyer confidence will be restored in our market. Despite the current challenges and disruptors, our part of the world remains extremely desirable offering an environment and a lifestyle that is second to none.
The natural beauty, our infrastructure, our schools and learning institutions, our local government and our international regard are entrenched, abiding attributes that intervening challenges to our market cannot diminish or erode.
The pivotal function of the agent in this dynamic is to communicate a clear understanding of the market and to ensure that a prospective seller is fully informed in a frank and objective fashion when considering the sale of their property.
I have said before that selling in a busy market where conditions are ideal, buyers are plentiful and demand is extreme is a relatively easy endeavour.
It is in a difficult market where an agent with knowledge, experience (in all markets), resilience and tenacity will see your property sold at the very best price possible.
This is a claim that cannot be made by newcomers to the industry such as the so-called online ‘self-service’ selling packages.
It is in such a market that your choice of agent will achieve you the greatest return in the sale of quite possibly your most valuable asset.
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