In the area 2 – Jo’burg

A definite improvement in the Johannesburg residential property market is evident in the latest results posted by the six Sotheby’s International Realty offices operating across the city – and the interest rate decrease this week is likely to give it a further boost.

That’s the word from Lew Geffen, chairman of Sotheby’s International Realty in SA, who says the number of homes sold by the group’s Johannesburg offices in the year to end-February showed a 47% increase compared with the previous 12 months, with turnover showing a 42% improvement as a result.

“And with affordability further improved by the 0,5 percentage point cut in interest rates this week, we expect to see sustained improvement over the next year.”

Geffen says that, as predicted at this time last year, it was big ticket sales that led the way to recovery. “Our Johannesburg offices achieved a 30% increase in sales of properties priced at more than R5m over the past 12 months, with the average sales price in this category rising from R8,8m to R9,3m.”

Of course, he notes, many of these multimillion-rand sales were cash deals and prompted less by declining interest rates over the past 12 months than by the perception among shrewd buyers that the market would reach the bottom of its downward curve by the third quarter of 2009 and would soon start moving up again.

“However, other sectors of the market that are more interest rate-dependent have also shown a major increase in activity in recent months, especially since the banks began easing their leading criteria. This has been particularly evident in the under-R1m bracket, where sales volumes at end-February were up a whopping 79% year-on-year and turnover showed a 74% increase.

“And even in the embattled R1m to R2m category, there was a 26% increase in both volume and turnover.”

Geffen says, though, that the sterling results achieved during a particularly tough year for the real estate market are also due in large part to the excellent performance of the agents working in the Johannesburg offices.

“An improvement in market sentiment is of little use unless you have the agents to make the most of it. On the other hand, the agents in our Johannesburg offices are all very experienced and battle-hardened from previous recessions, and have just proved themselves once again by achieving an increase in sales even in the worst of times.

“Such professionalism is just what Johannesburg home sellers should be looking for in the months ahead as the market continues to move back towards normal growth.”

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