Strong performance from Chas Everitt in cooling market
The hitherto resilient sellers market in the Western Cape is showing signs of strain as residential property buyers are more bearish in their outlook and expectations. However, the old adage of position-position remains true and there is still money to be made. Even those who speculate can still reap handsome rewards, although with more modest returns. Amateur speculators who have relied on the rising tide however would be better off looking for alternative investments.
According to André de Villiers of Chas Everitt Southern Suburbs, False Bay still has a 10% margin for price increases over the next year. As far as the Southern suburbs however are concerned, it is unlikely that there will be much of an increase. "I will not be at all surprised if the price increases between now and the year end is virtually nil says De Villiers, although there is certainly no indication that prices will drop. The rental market has softened with the exception of Muizenberg, where a number of developments are coming on stream. The supply of rental accommodation however, is still very limited."
Chas Everitt Northern Suburbs had another bumper month in June, again exceeding their budget forecasts. According to Charl Louw of Chas Everitt Northern Suburbs, they have constantly increased their market share. We are privileged that our area is not seasonally driven. The Northern Suburbs are increasingly becoming the preferred destination for many Capetonians says Louw. The proof of this popularity is supported by the statistics of RPPR (Residential Property Price Ranger issued to estate agents by Cape Property Services), showing that house prices for April 2006 in the Durbanville-Bellville area averaged R1,2 million compared to R1,4 million for the whole of the Western Cape. This gap has become much smaller than a year ago.
The Northern Suburbs, like many other residential areas in the Western Cape, are experiencing a slowdown in the number of units sold and the average time taken to sell property has increased to 6 weeks. Unfortunately, some sellers still do not realize that the market has changed to a buyers market. Price increases have slowed down and particularly in this period of increasing interest rates, sellers need to get used to accepting more realistic offers. We found that houses sell about 10% below asking price on average noted Louw. It is most important for every seller to get a proper market analysis done to obtain the maximum price for a house.
Oversees buyers looking to buy in the Northern Suburbs are fewer than a year ago says Louw, although our office recently sold 2 properties to oversees buyers through a website that Chas Everitt is hosting in partnership with oversees Associates. The website displays all 4000 of the Chas Everitt South African properties comprehensively throughout Europe.
Stellenbosch saw a sharp reduction in the number of active agents in the residential market. According to Elmarie van Huyssteen of the local Chas Everitt office, the number of active agents dropped from 150 in January 2005 to 118 in January 2006. In May 2006 there were only 108 agents still in the market.
During the past 2 months, 3 well known agencies closed their doors. Two were national franchises and one regional based says van Huyssteen. Many new agents however are still entering the market on a daily basis without proper training and possible catastrophic results for themselves and their agencies.
The Western Seaboard seems to have ignored the thread of rising interest rates to date. With turnover at 10 % of total stock in some places, the area remains one of the fastest moving regions in the Western Cape says Fanie Lategan of Chas Everitt Western Seaboard. We think there is still plenty of opportunities around and have embarked on an extensive recruitment drive to attract new agents.
The Western Seaboard covers an area stretching from Melkbos to Paarden Eiland and consists of approximately 27 000 residential units. This includes Melkbos, Blouberg, Parklands, Sunningdale, Tableview, Milnerton, Rugby and surrounding areas.
Property prices range from R350 000 in Parklands to R35 million on the Blouberg seafront says Lategan. Properties of up to R1,5 million are still selling in less than 2 months but properties above R1,5 million however are taking longer. Many sellers are over optimistic on what they can get for their homes and asking prices are often 20% more than selling price.
Chas Everitt Western Seaboard has diversified into the commercial market and it appears that several other traditional residential agencies are doing so as well. There is plenty of action in the commercial market and we expect it to continue over the medium term. We expect residential market to move sideways for the time being but to show new momentum as we approach the 2010 World Soccer Cup concluded Lategan.
Chas Everitt Southern Suburbs - www.iagent.co.za