Many residential areas in South Africa are seeing the green shoots of growth and one of these is Cape Town’s southern suburbs.
Over recent months, sales here have been showing year-on-year improvements, at rates faster than the Atlantic seaboard, says Hayley Vann-Herbert, sales manager of Jawitz Properties southern suburbs.
This means now is a good time to sell or buy.
“There are serious buyers out there at the moment who want to purchase in better areas, either to upsize or downscale. Now is definitely the time to buy as, in market terms, the percentage difference in prices between various suburbs is low. This gap will grow again once the market picks up.”
Despite the challenging economy and low business confidence, Herschel Jawitz, chief executive of Jawitz Properties, believes real buyers and sellers aren’t affected by these factors. To bolster this opinion, he says banks and financial lenders have been offering preferential lending rates, increased levels of bond approvals and 100% bonds have made a comeback.
“The perception that banks are part of the challenging market is wrong. Lending rates and approvals are the best they have been since 2008. A sluggish residential market means the banks are a lot more competitive now than they have been, with new lending products coming onto the market.
Jawitz Properties’ southern suburbs figures are reflecting double, and close to triple, percentage increases in the sale of free-standing homes and sectional title properties compared to last year, with sectional title homes leading the figures in number of units and overall turnover. These figures do speak to an increase in sentiment in the residential property market but Vann-Herbert believes it is also a result of their pricing strategies and the manner in which they work with their clients.
Even with the uptick, she says sellers are still holding on and waiting for the market to return to the highs of two years ago.
“It will take time - at least a year - for the market to turn noticeably, but it’s important for sellers to note that they too will be looking to reinvest in the same market when buying low, and at the same time upgrade to a larger home or better suburb.
“I believe there are two reasons why sellers should consider selling now. Firstly, if you sell now and invest the money, your return over a year in a fixed deposit account will be greater than the increased value of your property if you sell when the market eventually turns in any significant way. Secondly, if you’re a cash buyer, your bargaining power when buying your next property is much greater.”
Vann-Herbert adds that sellers need to weigh up the costs of hanging on to their homes in the hope of soaring prices.
“There are positives and negatives in any market but I honestly believe we’re at a point where both buyers and sellers can take advantage of the current property market.”