According to John Loos’ latest FNB Property Barometer report on Western Cape residential property, the national average property price increase was 6,6% year on year at the end of 2014, but once again Western Cape has come through as a “shining star” as a place to invest, says Lanice Steward, managing director of Knight Frank Residential SA.
Although 1,4% down on the fourth quarter of 2013 (15,2%), prices still rose by 13,8% year on year in 2014 in the Western Cape. The figures, once adjusted, show a real house price growth of 2,74%.
The report goes on to say that the average house price in the Western Cape was R1 272 303 in the 4th quarter (homes financed by FNB).
Loos’ report further reinforces what Steward has said in a previous press release, that the overall economic growth for the year was weak and that affordability issues might be arising and that disposable income growth has not kept up to the price growth levels.
Homes on average are taking three months to sell. The time it takes for homes to sell, however, is often indicative of whether homes are priced correctly, and sellers must bear in mind that buyers will do much research into buying a home. Sellers must, therefore, not think that they can achieve more than the market value for their home and out-price their property, she said. The closer the price is to the buyer’s expectations, the faster the property will sell.
What is of interest, however, is that foreign buyer numbers have increased and the popularity of residential property as an investment class is high. Despite political concerns in the country and the problems Eskom has created, the national figure of foreign buyers is 5,5%. The figure in the Western Cape, however, is much higher, at 10,5% of the total buyers in the sample areas in the second half of 2014.
On looking at PropStats, the Institute of Estate Agents’ Western Cape property data service, figures, said Steward, it is interesting to see that the figures reported there as averages are much higher – this is attributable to the areas in which the agents work that do report their sales figures to PropStats, which is predominately the Atlantic Seaboard, Southern Suburbs and Hout Bay.
The average selling price for 2014 on PropStats was R2 729 788 with properties taking on average 90 days to sell. When taking samples of specific areas within the Western Cape, the Atlantic Seaboard’s average selling price was R5 940 283 with properties taking 118 days to sell and the southern suburbs of Cape Town’s average reported as R2 957 589, taking 95 days to sell properties.
“It is well acknowledged that the service delivery in the Western Cape is in the top three in South Africa and people tend to recognise this,” said Steward. “There areas within the Western Cape that are still affordable though and one can find properties in the R1 million price bracket.”