The post election surge in demand for residential property, predicted by some estate agents, is now
Category News
Rowan Alexander, Director of Alexander Swart Property, said prior to the recent general election that he expected a clear-cut victory by the ruling party and that pro-business statements by President Ramaphosa would lead to increased confidence in the residential property market. This week he said that he was completely honest when he shared his views. At the time he suspected that there were agents who were saying much the same, in order to talk up the market.
Alexander added that although he had been convinced there would be greater confidence in property after the election; he thought that this would apply mainly to upper-middle and upper bracket property. " I was of the opinion that buyers in the R800 000 to R2 million category were less politically conscious and less affected by general economic conditions than those owning houses in higher price categories. It is now clear to me that I was wrong. Since the election, the market in the R800 000 to R1, 5 million bracket has taken off and is now the strongest in three years." (Alexander Swart currently has 234 homes for sale, all on sole mandates - but only 15 of these are priced above R2, 5 million.)
"The surge in demand for property in the sub-R2million bracket indicates that these middle-bracket owners are as politically aware as any others. I suspect that they are now less concerned about the issue of property expropriation than previously. The fears that were created by radical statements made on this matter six to twelve months ago seem to have subsided." Alexander adds there has been a noticeable uptick in the more expensive property brackets but it is much less evident than in the less expensive brackets.
Throughout greater Cape Town, but particularly in the northern suburbs, the biggest current demand is in the section which is experiencing the greatest shortages, i.e. townhouses in security estates priced between R1, 5 and R2, 5 million. Also much in demand is sectional title apartments in security estates, priced between R1 and R1, 4 million. The latter market is quite well provided for by developers, but the more expensive townhouse market is "wide open" to good, new projects. He added that there is a demand for sectional title properties from buy-to-let investors as well as owner-occupiers. In the townhouse market the demand is largely driven by owner occupiers.
Alexander's comments are corroborated by the latest FNB House Price Index, which shows that properties in the R700 000 to R3 million bracket experienced the greatest demand in the first quarter of this year - and were therefore set for a surge when confidence picked up.
The FNB figures, said Alexander, also show that 95, 3% of sellers dropped their prices to clinch a sale in the first quarter of this year. "With the evidence before us now, I expect sales conditions to improve steadily from here on."
Author: Independent Author
