Cape Town - The most significant emerging trend in the 2013 property market was probably the fairly rapid change from stock over-supply to stock shortages, according to Dr Andrew Golding, CEO of the Pam Golding Property Group (PGP).
"This trend was first evident in only a few areas within suburbs and is now widespread across all of the major metropolitan centres of the country," said Golding.
"It began to emerge at the end of 2012, but really only developed fully in the past six months."
The question is whether these stock shortages are a precursor, as they normally are, to a new phase of real house price growth.
There are a number of reasons why one could believe so, in Golding's view.
These include historically low interest rates, some pent-up housing demand generally in the system and perhaps most importantly, some renewed vigour and appetite for mortgage lending by the major banks.
However, counteracting this view is the still fragile state of the economy, the relatively high levels of consumer indebtedness and the fact that from a political perspective there is a general election looming.
"Nevertheless we remain cautiously optimistic that we will in fact see some real, albeit modest, house price growth in 2014, for the first time since 2008."
Over the past 12 months PGP saw a housing market which has performed pretty much in line with expectations. It was characterised by slow and steady improvement.
According to Lightstone’s analysis, house prices nationally have seen an average 7% year-on-year growth to September 2013, with a CPI rate of 6%.
Sectional title price growth overtook freehold in March 2013 and has enjoyed a stronger growth rate over the period since then.
Sectional title growth stands at 7.7% year-on-year and freehold at 6%.
Coastal properties slightly outperformed non-coastal properties at 6.7% versus 6% year-on-year, while the low end affordable market continued to perform well with double digit growth rates throughout the year.
Currently PGP’s average selling price for 2013 is R1.823m, up from R1.736m in 2012 - this versus a national average for the industry of about R900 000.
PGP found the greatest demand for homes across the various price sectors is by far that between R500 000 and R2m.
There has also been a notable increase of 37% in PGP’s sales activity in the price ranges from R3m to R5m and a somewhat more modest increase of 10% in the price band from R5m to R10m.
The marked increase of 60% in the top end of the market from R10m upwards, was due to the fact that this high net worth sector was by and large able to sit out the economic recession.
PGP, for instance, sold a R110m home in Fresnaye, Cape Town, a luxury penthouse apartment in Bantry Bay sold for R34.5m, an apartment in Melrose Arch in Gauteng for R24.561 million and a house in Knysna on the Garden Route sold for R23m, among numerous other sales in excess of R20m for residences on the Cape’s Atlantic Seaboard and Boland region.
While sales to international buyers are less than 1% of total sales annually across the market, the group has noticed a return of the international buyer to the market. The Cape Winelands seems to be emerging as a luxury second home destination
"While it is difficult to compare like with like, there is no doubt that South Africa offers high net worth buyers some world class options representing sound value for money," said Golding.
- Fin24
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"This trend was first evident in only a few areas within suburbs and is now widespread across all of the major metropolitan centres of the country," said Golding.
"It began to emerge at the end of 2012, but really only developed fully in the past six months."
The question is whether these stock shortages are a precursor, as they normally are, to a new phase of real house price growth.
There are a number of reasons why one could believe so, in Golding's view.
These include historically low interest rates, some pent-up housing demand generally in the system and perhaps most importantly, some renewed vigour and appetite for mortgage lending by the major banks.
However, counteracting this view is the still fragile state of the economy, the relatively high levels of consumer indebtedness and the fact that from a political perspective there is a general election looming.
"Nevertheless we remain cautiously optimistic that we will in fact see some real, albeit modest, house price growth in 2014, for the first time since 2008."
Over the past 12 months PGP saw a housing market which has performed pretty much in line with expectations. It was characterised by slow and steady improvement.
According to Lightstone’s analysis, house prices nationally have seen an average 7% year-on-year growth to September 2013, with a CPI rate of 6%.
Sectional title price growth overtook freehold in March 2013 and has enjoyed a stronger growth rate over the period since then.
Sectional title growth stands at 7.7% year-on-year and freehold at 6%.
Coastal properties slightly outperformed non-coastal properties at 6.7% versus 6% year-on-year, while the low end affordable market continued to perform well with double digit growth rates throughout the year.
Currently PGP’s average selling price for 2013 is R1.823m, up from R1.736m in 2012 - this versus a national average for the industry of about R900 000.
PGP found the greatest demand for homes across the various price sectors is by far that between R500 000 and R2m.
There has also been a notable increase of 37% in PGP’s sales activity in the price ranges from R3m to R5m and a somewhat more modest increase of 10% in the price band from R5m to R10m.
The marked increase of 60% in the top end of the market from R10m upwards, was due to the fact that this high net worth sector was by and large able to sit out the economic recession.
PGP, for instance, sold a R110m home in Fresnaye, Cape Town, a luxury penthouse apartment in Bantry Bay sold for R34.5m, an apartment in Melrose Arch in Gauteng for R24.561 million and a house in Knysna on the Garden Route sold for R23m, among numerous other sales in excess of R20m for residences on the Cape’s Atlantic Seaboard and Boland region.
While sales to international buyers are less than 1% of total sales annually across the market, the group has noticed a return of the international buyer to the market. The Cape Winelands seems to be emerging as a luxury second home destination
"While it is difficult to compare like with like, there is no doubt that South Africa offers high net worth buyers some world class options representing sound value for money," said Golding.
- Fin24
Add your voice to our Property Issue:
* Write a guest post
* Share a personal story
* Ask the experts