The January figures from PropStats, the Western Cape Institute of Estate Agents’ new monthly statistical review (available to agency principals and managers), gives further encouragement that the Cape residential sector’s recovery is gaining momentum.

Over R1 billion worth of confirmed sales were reported by the 160 offices that now supply PropStats with data, says Annette Evans Manager of PropStats. (Confirmed sales are those on which not only has the sales agreement been signed but all the conditions have been met and the bond has also been granted – if a bond was required – so that the transfer is able to go ahead.)

Significantly, says Evans, the average sales price has not yet risen much, although sales volumes are definitely on the increase: the average sales price in January was R1,7 million - with most of the activity taking place in the Parklands, Table View and Blaauwberg areas, where the average sales price was R1,1 million. (For the record, the Atlantic Seaboard, excluding Hout Bay, achieved an average of R4,5 million.)

Evans says that her reading of the current situation is that the vast majority of agents now expect a 5% to 10% upswing in prices before the end of this year.

This confidence, she says, is based, at least in part, on the fact that the achieved prices are now on average within 10% of the asking prices and the time it takes to sell a property is dropping to as low as between 80 and 90 days, which is a real indicator that buyers are more keen to get back into investing in property once again.

“As I see it,” says Evans, “the chief limiting factor now is simply the banks’ ongoing difficulties in financing bonds: in January almost 50% of the buys were for cash, whereas in more “normal times” the figure used be under 15%.

“The impression in the industry is that only 25% of bond applications are now successful, and although this is obviously due to the fact that many clients submit bond applications when they are clearly not in a position to comply with the National Credit Act rulings, even the agents, who regularly carry out thorough pre-qualification tests, report that they are still getting just under a 60% success rate. If and when this situation changes, the residential market, I am convinced, is set to recover quickly.”

Article from: www.propstats.co.za