Estate agents throughout the Western Cape have been reporting healthy sales figures over the past few months thanks to increasingly positive buyer sentiment. “The figures are all the more impressive given that the winter months are traditionally quieter for the Cape property market,” says Mike Greeff, CEO of Greeff Properties, an exclusive Affiliate of Christie’s International Real Estate. Greeff’s July sales revenue figures reflect a 137 percent growth on those of July 2012. “We’ve moved way past the revenues of July 2007, which was by all accounts a boom year, in fact our revenues by the end of July 2013 are already sitting at 81 percent of our total revenues for 2007,” adds Greeff.
Greeff says that property sales have been across the board, from sectional title apartments to smaller and medium sized family homes throughout the Southern suburbs, False Bay, City Bowl and along the Atlantic Seaboard, right up to a flurry of sales in the luxury sector. “ In the past few weeks alone, Greeff agents have sold a number of high-end properties in Constantia upper, Bishopscourt and False Bay ranging in price from R8.75 million for a six-bedroom, five-bathroom Bishopscourt home with five garages, to R18 million, for a three-bedroom, four-bathroom home in a Constantia Upper security estate,” says Greeff. Other sales recently concluded by Greeff agents in the luxury sector include: A 3328 metre² plot in Bishopscourt for R9.5 million, a four-bedroom, four-bathroom, ocean-front house in Fish Hoek for R10 million, a six-bedroom, six- bathroom home in Claremont Upper for R10.5 million and a five- bedroom, five- bathroom Constantia Upper home for R16.324 million, among others.
“The current upsurge can be attributed to a number of likely factors, key being that banks are lending to more buyers,” says Greeff. He adds that the average percentage deposit required by finance providers considering bond applications has dropped by 7 percent from an all-time high of 23 percent in February 2013 to 16 percent currently. Furthermore, the banks are granting larger amounts to borrowers. According to Rudi Botha of mortgage originator Betterbond, the average approved bond amount has risen by 8.2 percent year-on-year, and is currently positioned at its highest level since July 2011. “Added to this are the prevailing low interest rates. Combined, these factors are giving buyers just enough room to manoeuvre and find the funds to make their monthly payments,” says Greeff, adding that an increasing number of these buyers are entering the market for the first time. According to Rudi Botha, in July 2013, 39 percent of all applications for home loans were from first-time buyers.
“Another positive trend is that statistics from the Reserve Bank indicate that the growth in outstanding credit balances in the household sector has slowed to single digits over the past six months from its year-on-year peak of 10.4 percent in November 2012,” says Greeff, adding that all of these indicators bode well for the upcoming summer months when buyer interest traditionally is expected to peak. “We’re also expecting interest from foreign buyers watching the weaker rand with a view to scooping up a valuable coastal property,” adds Greeff.
Greeff does caution that while banks are lending more, they have not necessarily become more lenient on criteria. He explains that bond applicants should bear in mind that the lenders will first investigate your credit history and your disposable income, once monthly living expenses and any debt obligations have been met. “It’s unwise to assume that the possession of other large assets will instantly mean that the bank will grant a mortgage,” says Greeff, adding that anyone trying to secure a bond should be aware that banks change their criteria all the time, often weekly or with even greater frequency, however bond originators make it their business to remain abreast of all these changes. “It’s therefore in your best interest to use an expert who will make multiple submissions to various lenders in order to maximise your chances of getting financed,” says Greeff.