The Southern Suburbs sectional title sector has continued to perform well despite the subdued economy but, at times like these when the market is under pressure and properties take longer to sell, correct pricing is the key factor in achieving a quick sale.
This is according to Barbara Andrews, Area Specialist of 25 years for Lew Geffen Sotheby’s International Realty, who works exclusively in the area with partner, Matthew Raubach.
Although demand is still strong and property values continue to show growth, there has been a notable increase in the length of time properties remain on the market. We now regularly see apartments that would have sold in a matter of weeks a year ago, taking considerably longer to sell but this is more often due to pricing than anything else. They usually sell quickly once the price has been lowered.
“Not all sellers appreciate the extent of the recent market shift to a decidedly buyer’s market for the first time in many years and that unless they adjust their expectations, their properties could take months to sell.”
She adds that buyers are also much more savvy nowadays, many doing their homework before taking the leap. “When apartments are priced correctly, they WILL sell – especially those in the entry and middle markets. Sectional title property in the Southern Suburbs also remains a good investment offering solid returns.
“In 2012 and 2013 we brokered the sale of two unrenovated flats which we sold again last year. The first was an 80m² unit in Upper Plumstead which was originally sold for R550 000 and renovated by the new owner, resold for R1.475m and the second was a two-bedroom Diep River apartment for which the buyer paid R580 000 and then resold in the same condition in 2017 for R875 000.”
Lew Geffen, Chairman of Lew Geffen, Sotheby’s International Realty, says that Lightstone data clearly corroborates the ongoing growth in the sectional title market, especially when looking at the areas where buyers still have a choice of apartments priced in the entry to mid-level price bands.
“In 2015, the median apartment price in Wynberg was R820 000, increasing to R932 000 in 2016 and to R1m last year. During the same period, the median sale price in Plumstead rose from R832 000 to R985 000 then last year it shot up to R1.112m.
“However, while the apartment registrations in Plumstead rose from 151 in 2016 to 154 last, Wynberg did acquiesce slightly to the prevailing market with a slight dip in registrations, from 228 to 183.”
Geffen adds that during the last 12 months, ending 31 January 2018, the best-selling price band in both Wynberg and Plumstead was the R800 000 to R1.5m bracket with 71 of 188 total sales and 94 of 158 total apartment sales respectively.
Andrews says that the current market has also precipitated a “wait and see” attitude, with investor buyers taking a step back due to the political turmoil and ongoing drought in Cape Town although purchasers who are buying homes to live in are less circumspect.
“I have also noticed an emergent trend – that of parents purchasing property on behalf of their children to help them get a foot onto the property ladder.”
She concludes: “The year got off to a slow start but now that Cyril Ramaphosa has been sworn in as president, I think the market will start to recover quickly and we look forward to a very exciting year ahead. However, the market and general economy won’t bounce back overnight so it is crucial that sellers continue to have realistic expectations and ask market-related prices.
“Now more than ever it’s imperative for sellers to appoint an agent who can advise them, especially regarding the selling price to ensure their property doesn’t sit on the market whilst maximising return on investment.”
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