Throughout the South African middle class urban and suburban residential property market, the story today is much the same: demand has grown fast since the global slump of 2008/2009 and now there is not enough stock to meet buyers’ needs – and sellers, aware of this, are sometimes tempted to overprice their homes.
This scenario, say Colin Kretschmer and Brenda Ricci, respectively manager and senior agent at the Rawson Property Group’s Bothasig franchise, is now evident in Edgemead, a precinct served by this team, with Ricci, who has had 27 years property selling experience, as the agent dedicated to the area.
Reviewing what has happened so far this year, Ricci said that only 43 Edgemead homes have so far been sold by the agencies serving the area, but the figure could have been more than triple this had the stock been available.
“On any correctly priced Edgemead home,” she said, “we can find a buyer in one to three days. Demand is so strong that it has pushed up prices by 30 to 40% – in some cases more – since 2012 and the indications are that they are continuing to rise, although possibly at a slower pace as banks are now questioning the values achieved.
“The average freestanding house at Edgemead today costs R1,4 million according to Deed Office figures compiled by Lightstone and by our estimate it is R1,6 million. There are, in fact, certain homes which have sold close to, or above R3 million. In the sectional title market the average price is now R1,1 million, but of course there is very little sectional title property available in Edgemead and its surrounding suburbs.”
One home sold by Ricci in 2002 for R350,000 was recently resold for R1,4 million – and it had almost no improvements done to it during the intervening period.
Demand for Edgemead homes, said Ricci, is fuelled by the fact that it is so attractive. It has a leafy, well treed and landscaped garden city ambience and was in fact the first garden city to be developed in South Africa after Pinelands. Old Edgemead in particular, she said, is especially popular on account of its good schools, tennis, bowling and other sporting clubs, many churches, a thriving business park, a sophisticated retail centre (with good restaurants) and its wonderful community spirit.
A further factor boosting demand, said Kretschmer, is the close proximity (12 km) to the centre of Cape Town. Out of peak hours the car journey can be done in 10 minutes and even during peak hours can often be done in 45 minutes or less.
Also spurring on demand, said Ricci, is the huge reluctance of people throughout the Edgemead/Bothasig/Summer Greens precinct to move elsewhere.
“Traditionally,” she said, “people will always try and upgrade within this area. For example, a resident in Summer Greens, where the average price of a three bedroom home is R650,000, might try to move up to Bothasig, where the average price of a similar home is R1,2 million. Very few people are prepared to leave the area.”
Looking ahead, Kretschmer said that although price rises could stabilise in the year ahead, they are, in his view, set to continue and, despite the difficulties in obtaining a home, it is worthwhile persevering with house hunting until the goal is achieved.