New survey shows Jo'burg market carnage
Sales volumes have dropped by up to 100 percent in some Johannesburg suburbs and home prices have fallen substantially in most parts of the metropole, according to the Gauteng Property Price Indicator (GPPI) produced annually by Sothebys International Realty in SA.
Compiled from Deeds Office figures, this reveals the shocking extent of the damage done to the Johannesburg property market over the past year by the combination of high interest rates and the credit shutdown.
There are many suburbs, says Lew Geffen, chairman of Sothebys International Realty in SA, where there has not been a single sale in 12 months, and there are others where the average sale price being achieved has halved.
However, it does appear as if the worst is actually over. We are seeing the emergence of many potential buyers who are keen take advantage of the lower property prices and who will simultaneously help to reboot the market once interest rates are further reduced and the banks lower their current 15 to 20 percent deposit requirements to something more reasonable.
What is more, he says, sale and price performances are highly localised and there are some suburbs that have actually stood up to the storm and done relatively well.
The GPPI shows, for example, that the number of freehold homes sold in the 12 months to end-February 2008 dropped by an average of 25 percent in the central suburbs of the metropole, with Hyde Park and Melrose each recording a 33 percent drop and Sandhurst a 26 percent drop, while sales in Atholl fell only 17 percent and in Houghton by just 3 percent.
In the north eastern sector, sales fell by an average of 36 percent, with Kyalami recording a 48 percent drop and Douglasdale a 42 percent drop while areas such as Dainfern ( -35 percent ), Fourways (-32 percent) and Lonehill (-29 percent) fared a little better.
In the northern suburbs the number of sales dropped by an average of 32 percent, with Bryanston and Morningside each recording a 27 percent drop and Sunninghill sales falling off by 25 percent, but Paulshof and Rivonia each recording a 52 percent decline.
To the west, the average sales decline was 34 percent, with areas such as Helderkruin (-45 percent) and Ruimsig (-53 percent) being among the worst performers. The average 27 percent decline in the eastern suburbs was topped by areas such as Dowerglen (-32 percent) and Kensington (-48 percent).
According to the GPPI, areas where freehold sales fell to zero in the past 12 months include Craigavon, Glenfernes, Kyalami Park, Bagleyston, Glenkay, Rand View, Killarney and Riviera.
However the indicator also shows that there were some areas where sales still exceeded 100 units in the past 12 months, and Geffen tags these as being the most likely to show quick price increases once the market starts to recover. They include Bedfordview, Blairgowrie, Bryanston, Douglasdale, Ferndale, Fourways, Kensington, Lonehill, Malvern, Morningside, Newlands, Northcliff, Orange Grove, Parkhurst, Parkmore, Randpark Ridge, Sunninghill, Sydenham, Weltevreden Park and Westdene.
Article by: www.sothebysrealty.co.za