The property sales market is experiencing a substantial improvement in terms of numbers of sales. What is driving this improved activity? In our opinion, it’s a combination of:
- Low interest rates; the prime rate it as it’s lowest point since 1965 and is expected to stay low for the foreseeable future.
- Pent-up demand; the Coronavirus pandemic significantly reduced property sales.
- Continued “semigration”; there is an accelarating trend of people choosing to move for higher standard of living as more workers are able to operate remotely for extended periods.
- Adjusted seller expectations; price expectations have reduced materially, and per SQM pricing is 25% to 30% below the peaks achieved in 2017/18.
- Reduced political risk/improved political confidence; there appears to be significant progress in the ANC and SA government’s fight against corruption.
We’ve seen a marked increase in the number of foreign buyers looking to purchase in the area, both as holiday homes and people looking to immigrate to South Africa.
The chart below clearly shows the increased activity in the Camps Bay market (especially in full title properties). 16 of the 18 apartments sold in June 2019 were a single transaction (the sale of the Woodlands apartment block in Upper Tree Road).
Per square meter pricing of both full title and sectional title properties is materially down, and the average for the past twelve months is approximately R45,000 per sqm (down from approximately R60,000 two to three years ago).
Clifton is also experiencing increased activity, and although the volumes are not increasing as fast, the prices being achieved have been encouraging, and appear to be rebounding quickly.