Economic conditions are tough and the property market is flat, but that means buyers are at an advantage.
Property buyer behaviour and trends are crucial indicators of the market, not only because they greatly affect the rate and prices of sales, but also the length of time homes stay on the market.
National sentiment is “on the up and up”, says Samuel Seeff, chairman of the Seeff Property Group, but consumers have had to absorb the effects of VAT and other indirect tax increases, petrol price hikes and land reform uncertainty.
Sellers will therefore need to continue keeping their eyes on market conditions which affect selling, including how long it takes to sell, and the prices buyers are prepared to pay.
Also important, says Seeff, is to know whether there is an over or under-supply of buyers.
While Absa and FNB property barometers point to improvement ahead, they still tell the story of a flat market which largely favours buyers. Seeff says recovery is usually first felt in the primary urban Gauteng (Johburg/Pretoria) areas, and thereafter in the coastal and other inland metros.
“On the upside, banks are granting more home loans and with the interest rate drop, it is a good time to buy property.”
While 12 weeks to sell characterises a healthy market, sellers should note the average still sits at just over 14 weeks. Gauteng areas, such as Joburg and Ekurhuleni, are “doing well” at around 12 to 15 weeks, and 11 weeks for Pretoria.
Seeff says statistics show Cape Town is at around 15 weeks, but longer for upper end areas. Durban (eThekwini) and Port Elizabeth (Nelson Mandela Bay) still lag notably at 21 to 22 weeks.
“Over 90% of all sellers still need to drop their price to conclude a sale while house prices remain under pressure. The Western Cape in particular faced the double challenge of a decline in semigration buying and the water crisis.”
Although secondary home buying is expected to improve, it is still at around 13% – from 20% in the pre-2007/8 boom period. Foreign buying, also mooted for an uptick, still sits at just over 4% of all residential buying, with even buying from the African continent down due to weaker economic conditions on the continent. Expat buying remains low at 1.5% of all buying.
“The upside to this is that it is a great time to buy, especially if it is your primary residential property,” says Seeff.
“We remain upbeat about the year ahead and the sentiment and economic improvements filtering through.The property market is a factor of the economy and we usually see a lag in improvement. That said, if you are looking to buy or invest in property, you would not want to leave it too late, because once the market takes off, so too, will the prices.”
Areas for first-time buyers
Here are some budget-beating picks in the R500000 to R1.5million price range for first-time home buyers in Cape Town.
Richwood, Bothasig and Burgundy Estate
Richwood, Bothasig and Burgundy Estate offer plenty below R1.5m. The areas have easy access to the N7 and N1 and are close to Table View, Milnerton, Blouberg and Century City, making them sought-after options for budget-conscious buyers, says Johan Jacobs, Seeff licensee for the areas.
In Bothasig and Richwood, you can find a house in the R1.3m-R1.5m price range, while Burgundy Estate offers apartments from R1m, houses from R1.8m and rentals from R8500/month. For R1.69m, you can get a property with sunset views, a built-in braai, high-end finishes and two basement parking bays.
Mitchells Plain, Capricorn Beach Estate and Costa da Gama
Cape Town’s south-eastern suburbs also offer affordability, says Gary Grobbelaar, chief executive for Seeff False Bay and south-eastern suburbs. Mitchells Plain offers small houses from R500000 to R900000. Next to Muizenberg, at the bottom end of the M5, Costa da Gama and Capricorn Beach Estateoffer excellent affordability, he says. Prices at Capricorn Beach Estates start at about R1.2m for a small two-bedroomed home.
Costa da Gama includes developments from about R850000 to R1.2m says Seeff’s Paul de Roos.
Brackenfell, Kraaifontein and Kuilsriver
Karla Coetzee, Seeff’s manager for the Brackenfell, Kraaifontein and Kuilsriver areas, says the commute to the city and beaches is worth it for the price paid per square metre. These northern suburb areas offer a laid-back, family-conscious lifestyle with affordable spacious apartments and homes near popular schools.
Prices start at about R500000 for a flat in Kuilsriver and from R980000 for houses (Highbury and Hagley). Kraaifontein apartments start at R650000 (in estates) and houses from R850000 (Belmont Park, Peerless Park East and West). Homes near Cape Gate Mall start from R1.4m. Brackenfell flats range from R750000 and townhouses start at R1.5m.