There is a sense that the property market wants to recover; is trying hard to do so, yet is faced with challenges which makes its recovery somewhat erratic, said Keith Wakefield Chairman Wakefields Real Estate, the largest independent (non-franchised) real estate company in KwaZulu-Natal.
Wakefields figures show that October, with over R350 million worth of property sold, was a record month. Sales were up 15% on October 2011 which in itself was a record month. This is not an isolated figure. July was up year-on-year by 60% in terms of sales value and August sales were up 32% year-on-year providing the best trading months in four years.
Prices in some areas have already moved up and there are indications that this could become more wide spread in 2013 thus spelling the end of the road for buyers hoping to find a bargain buy, said Wakefield.
For many months real estate agents have reported shortages of correctly priced good properties for sale. This shortage initially experienced in affordable areas is spreading to more affluent areas.
Sellers of correctly priced properties are, in most cases, achieving their asking price and selling reasonably quickly. This means there is market activity and buyers are slowly realising that the market is moving from a buyers’ to a sellers’ market albeit price and area driven, said Wakefield adding that by contrast overpriced properties were sitting on the market for months.
Land sales from Ballito to the South Coast have also started to move.
Affordability and price remain important factors so it is not surprising that in areas such as the Durban beachfront, Chatsworth, Phoenix, Malvern and Pietermaritzburg properties under R1 million are selling quickly. First time home buyers, which according to ooba make up around 50% of the buying market, and a new middle class that wants its own home are driving this sector of the market.
In more affluent areas the popular price segment is under R2million with properties priced at R1, 5 million and R1, 6 million selling best.
Some wind is also starting to catch the sails of the top end of the market particularly on estates where demand has been resilient.
At Mount Edgecombe Country Club Estates I and II there have been 73 sales since August across all accredited estate agencies. This is the same pace that was set in 2007 which resulted in an outstanding sales year. This is also a significant increase on the number of sales concluded in each of the years from 2008 to 2011 and stock levels have reduced.
At Cotswold Downs R40 million worth of property has been sold in recent months. Top sales include a R3 million apartment on North beach, R22 million at Zimbali Coastal Resort, R8.6 million in Umhlanga, and a R22 million sale at the Pearls of Umhlanga.
While the property market is trying to break into an upward trend it still faces headwinds. Bank lending criteria remain strict and buyers generally need a deposit. The level of household debt relative to income needs to decline; savings need to improve significantly and households need to make the big adjustment to the sharp hike in rates and utilities tariffs, said Wakefield.
Therefore, it is likely that 2013 will be much the same as 2012 and the past four years. There will be months of excellence, well priced properties will sell quickly, prices in some areas will inch upwards and areas will perform differently as they always do, he said.
