Residential property in East London has undergone a 3 to 5% rise in price in the last nine to 12 months and it is beginning to look as if the recently improved sales rate will continue, at least until mid-2014, says Sanet van de Merwe, the Rawson Property Group’s franchisee for the East London Beacon Bay franchise (which operates across the length and breadth of East London, working in tandem with the Rawson Property Group’s other franchise in this area).
Sales in East London, said van de Merwe usually slowdown in the mid-year winter period, but then pick up towards the end of the year.
“Our sales team,” she said, “have been averaging approximately ten sales a month recently and I am reasonably confident that we will see this performance continuing, with, as mentioned, a slight mid-year dip.”
Most sales, said van de Merwe, have been in two main categories: houses in the Beacon Bay area priced from R1,3 million to R2,5 and houses in the Amalinda area priced from R600,000 to R1 million.
Homes priced above R2,5 million, said van de Merwe, are still selling at a slower rate than the lower priced homes — the reason for this, in her view, being that the global economic recession is still affecting the upper price bracket countrywide.
Asked to define what she means by a ‘fast sale’, van de Merwe said that at the moment, with stock in short supply and buyer demand very strong, any correctly priced home in either of the categories mentioned will probably sell within two weeks and will do so at its asking price or very close to it.
Regrettably, she said, perhaps 60% of sellers will, at least initially, try to persuade their agents to set a higher than realistic price and some will always stick to their opinion and refuse to take advice on this matter. Nevertheless, she said, this tactic very seldom works and in most cases, eight to 12 weeks later, if the seller is serious about getting a sale, will have to reduce their price.
One of the services on which her team prides itself, said van de Merwe, is its ability to help buyers prequalify for bonds – and in the R600,000 to R1 million they achieve a 80% success rate. In the lower brackets the success rate is somewhat lower.
While the 2008 to 2010 recession made itself felt, said van de Merwe, it is a proven fact that property in East London did, in fact, maintain its values rather better than those in most of South Africa’s big centres and this, she believes, is due to the fact that big businesses and industries continually transfer staff in and out of East London. This trend has been particularly evident recently and is no doubt one of the reasons why sales have been satisfactory.
“Looking at the overall picture,” said van de Merwe,” the only conclusion one can come to is that now is a good time to buy property in South Africa because the long-awaited upswing, we believe, is here to stay.”