Unrealistic seller expectations are hampering sales in Rosebank and Mowbray which would, otherwise, be unrivalled in terms of value and convenience.
When demand for property in Cape Town spiked a decade ago, investors became aware of both suburbs’ drawcards and Tina Malyon, area specialist for Lew Geffen Sotheby’s International Realty, said this spurred previously slow markets and pushed up prices.
“However, in a subdued market where increasingly well-informed buyers are spoilt for choice, 2017 prices are simply not achievable and realistic pricing is critical to secure a sale.”
The shift is reflected in the growing gap between asking and selling prices and the time properties spend on the market, says Claude McKirby, the group’s co-principal in the southern suburbs.
“Propstats figures show that, on average in 2017, houses in Mowbray were sold for 3.9% less than the asking price within 11 days and houses in Rosebank fetched 5.4% less than advertised within 22 days.
“This year, homes are taking an average of 51 days to sell for 5.4% under asking price in Mowbray and in Rosebank sellers are achieving around 7.7% less than asking within 58 days.”
Well-priced properties in these suburbs are still being snapped up, often within a month.
Over-valuation by inexperienced agents or those trying to secure sole mandates in a tough market is exacerbating the problem as prices eventually have to be adjusted after the property has spend considerable time on the market.
Rosebank and Mowbray are conveniently located, especially being close to UCT, and so both suburbs have “very active” rental markets. About half of current purchases are investment buys.
“For between R2.5million and R3.5m one can buy a two or three-bedroom home in Mowbray with at least one en suite bathroom and double parking and, for those with larger budgets, a stunning four or five-bedroom house in Rosebank with two lounges and a good-size garden with a pool for between R4m and R5m.
“In neighbouring Rondebosch, similar homes cost upward of R4m for a three-bedroom house and R5m for a home with four or more bedrooms, with most being in the R6m to R8.5m range,” Malyon says.
“A decade ago, both suburbs were often overlooked as the domain of students and the arty set and the median house price in Mowbray was R835000 and Rosebank R1.1m. It often took months to sell a property, with some homes remaining on the market for more than six months.
“It’s now a very different scenario with strong demand from young families and professionals. However, this demand can translate into sales only if homes are priced realistically.