Samuel Seeff, chairman of the Seeff Property Group says that there has been a strong upsurge in the secondary market on the coast and luxury price bands on the Atlantic Seaboard.
“We have seen prices top R100 million for the first time in years. Aside from local buyers, there has also been strong demand from semigration and foreign buyers,” he said.
“Selling is for a variety of reasons dominated by lifestyle changes in view of pandemic-related shifts including semigration to the Cape and other areas. While some are looking to downscale for financial or other reasons, many are selling to upgrade and we have seen more activity in the R3 million to R5 million price bands,” he added.
Seeff said the market remains well-balanced in terms of sufficient supply to meet buyer demand with some exceptions in the high demand price bands and areas. At the same time, house price growth has slowed to around 4% on average – slightly higher in the lower price bands.
“The advantage of the flat price growth is that there is still excellent value in the market, especially at the higher price bands and buyers should take advantage. Sellers will, however, need to price realistically or they could miss out on the favourable market phase,” he said.
Data taken from FNB’s Property Barometer showed that the average time for a home on the market is seven weeks and six days.
“Current buying activity is largely driven by demand recovery in the affluent markets, stoked by good pricing (value for money following significant price declines in recent years), the low interest rate environment, and the work from home (WFH) trend.
“However, we are concerned about rising geopolitical tensions, which may sour buyer sentiment,” said FNB.
Price growth by region
Nick Pearson, chief executive officer of Tyson Properties noted that the upper end of the market has returned in the Western Cape, which means it is only a matter of time before it also rebounds in areas like Umhlanga, Ballito and parts of Gauteng.
“We find that if the Atlantic Seaboard does well, then this positivity filters through. When you start seeing investments of R100 million in a single property – as we’ve seen in December – then you know there is a growing positive sentiment,” said Pearson.
Pearson said the positive bands are at the top and bottom ends with emerging or first-time buyers propping up the market and creating the perfect supply-demand scenario.
Properties priced at around R1.2 million – which are the ones that the average South African buyer can afford – are still selling quite quickly.
“We’ve had good results coming out of Johannesburg this year. It is probably the most stable market when it comes to properties priced between R1.2 million and R3 million. We are seeing a huge amount of first-time buyers in this market.
“We’ve seen semigration as people move from the suburbs to estates with the emerging buyers of yesteryear becoming repeat buyers who are now purchasing these larger properties,” he said.
Although he does believe that the recent and further future rates increases might marginally cool enthusiasm in this segment of the market, he points out that it will not impact on the upper echelons of the market.
“These are not first-time buyers and will have experienced rates turbulence in the past,” he said.
Pearson added that buyers in the R3 million-plus category are semigrating to Cape Town and bolstering the upper end of this market along with foreign buyers who are exhibiting growing consumer confidence in the region.