Sandton market under pressure
The Sandton property market, a key indicator of conditions in the upmarket real estate sector, is taking strain.
So says Natali Giannakakis, principal of leading local agency Homenet Professionals, who notes that the area usually weathers property storms very well, but is definitely showing signs of the current slowdown.
Buyers budgets have decreased significantly recently thanks to the tough economic climate and stringent bank lending criteria and determined sellers are being forced to drop their asking prices in order to secure a deal. Consequently, freehold cluster properties in the area are now selling for an average of R2m - down R500 000 from this time last year.
What is more the incidence of foreclosures and auctions has increased noticeably, she says.
However sales volumes have remained fairly steady. Sandton still has plenty of appeal as the area offers stunning homes that will rapidly increase in value when the market turns upwards again. Buyers that have the means are consequently striking while the iron is hot and upgrading while prices are relatively low.
Sectional title properties priced at around R800 000 have also gained in popularity and with development in the area having eased off; these should also show good growth in the next few years.
Meanwhile, the Sandton rental market is booming, says Giannakakis, with properties that are well-priced being let almost instantly. Rentals are typically around R5000 to R6000pm for one-bedroom apartments.
However there is a fly in the ointment here too, as we are finding that on average two out of three prospective tenants are blacklisted.
Nevertheless, she says, the year has begun on a much more positive note than that which prevailed in the last months of 2008, and the recent interest rate cuts bode well for the coming months, especially after the upcoming election.
Article by: www.homenet.co.za