Property phoenix rising

Two well-known estate agencies are reporting a surge in sales, pointing to the possible end of the downturn...

According to Greeff Properties MD Graham Leslie, their sales turnover since March had increased month by month (with the exception of May) and that since June the pickup had been 'almost spectacular'.

The actual year to year figures read as follows: March up 38 percent, April up four percent, May down 27 percent, June up 91 percent, July up 25 percent and August was a staggering 232 percent up in Cape Town's southern suburbs alone.

Selling like it's 2006

"In August," said Leslie, "we actually notched up R84-million worth of sales, a monthly figure we last saw at the height of the 2006/7 boom."

Mike Greeff, CEO of the group, added that what was particularly impressive was that, even after knocking two large sales off the list, the growth in August was still up substantially on August 2008.

"I am not saying we are out of the doldrums yet," said Greeff, "but it does appear that an upward trend is now evident — and talking to the leaders of some of the other larger brand names, it would seem that they are experiencing much the same sort of trend."

Greeff added that the figures refer only to Cape Town’s Southern Suburbs — they do not take into account any of the sales achieved by the new branches licensed by Greeff to Marion Taylor’s operations in Camps Bay, Hout Bay and the City Bowl.

Break out the champagne?

Various indicators are suggesting the worst may really be over for the property market.

"It’s not quite time to break out the champagne yet, but key aspects of the market are now looking good and we are hopeful of recovery," says Gerhard Kotzé, CEO of the ERA South Africa property group.

He refers firstly to Absa’s recent comments that although house prices are expected to decline further for the rest of 2009 and possibly into early 2010, the pace of the decline will slow.

"And research company Lightstone goes even further, noting that its National Repeat Sales House price indicator is still slightly negative year-on-year, but has nevertheless shown a month-on-month increase since January this year. According to Lightstone, annual house price inflation is now effectively moving sideways."

There is still risk

Kotzé says there is admittedly still a risk that various extraneous factors could upset the proverbial applecart, sending the market lower once again.

"We are somewhat at the mercy of global as well as regional economic and other influences and there is still an over-supply of unsold property stock due to slack demand and repossessions. Consumer confidence is also still relatively low according to the latest reports.

"However, the world economy does seem to be coming steadily out of recession and although South Africa is lagging in this respect by about three to six months, we have managed to weather the general storm far better than most countries, so the dip in our property market has not been as severe as elsewhere."

He cautions, however, that as things start to look up, care needs to be taken to avoid an over-reaction that sends property prices soaring once more in a short space of time, risking another painful downward adjustment and certainly attracting inflationary speculation and higher interest rates again.

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