The main problem encountered by estate agents today is the serious stock constraints in all areas in the affordable to R10 million price categories, and on looking at PropStats (the Institute of Estate Agents, Western Cape property sales data service) there is an indication that prices are being pushed upwards in some areas as well as taking shorter periods to sell, particularly on the Atlantic Seaboard, says Lanice Steward, managing director of Knight Frank Residential SA.
In 2013, figures of sales from January to September show that 650 units were sold at an average price of R4 826 936. These properties took on average 125 days to sell and there was a 13,5% price difference in the asking to achieved sales price.
This year, during the same period PropStats indicates that 557 properties were sold. The average selling price is listed as R5 899 310, with a 9,3% difference between the asking and selling price, and properties are taking on average 111 days to sell.
“What should be borne in mind here, however,” says Steward, “is that not all the sales for September would have been captured as yet and there may be more coming in. What is interesting to see though is that, while there is a reduction in volume, there is a definite increase in the average selling price and a reduction in the time it takes to sell a home here.”
The 22% increase in the average selling price from last year to this year, is being driven by demand for units in this area and with the stock constraints, should continue, said Steward.
John Loos’ 3rd Quarter FNB Estate Agent Home Buying Survey indicates that homes nationally are selling on average 81 days to sell. We can deduce by comparing the national figures to that of PropStats that homes at the upper end of the market are taking longer to sell than at the lower end, said Steward.
In 2014 to date, there were 84 homes listed on PropStats that sold over R10 million on the Atlantic Seaboard, and these took an average of 262 days to sell. In the R5 million and below price bracket (375 homes), however, properties took an average of 60 days to sell.
According to Loos, the national drop in asking price to selling price is 8% but on the Atlantic Seaboard, at the lower end of the market it is 5,8% and at the higher end 11,2%.
“All agents in all areas are experiencing stock shortages in the rental and sales market. Given that we are going into the summer season, which is traditionally when most people tend to buy and sell, we can expect increasing pressure on the market, pushing prices upwards even further,” said Steward.