If you’re planning to sell your large family house and downsize to a smaller property, now’s the time to make your move, says Jan Davel, MD of the RealNet estate agency group.
“The prices of large homes have shown much greater growth in the past year than those of small or medium-size properties, and owners in many areas are finding that it is not only more convenient and secure to move to a smaller home, but that there are immediate financial benefits as well,” he notes.
“According to the latest Absa Housing review, the average price of large houses (220sqm to 400sqm) has risen 6,2% in the past year to R1,94m, while that of medium-size homes (140sqm to 220sqm) has risen only 4%, to R1,22m. And there are even bigger discrepancies in some areas that are giving further impetus to the downscaling trend – and to inter-city relocations.”
Davel says that in Port Elizabeth, for example, the average price of large homes has risen by 27,2% over the past 12 months to R1,86m, while that of medium-size properties has actually declined by 6,5% to just R814 000.
“Consequently, owners of large homes here may well be able to use the proceeds of their sale to buy a medium-size home for cash and still have some money left over, especially if they have owned their existing home for a long time and built up their equity.”
Similarly, he says, downsizing is set to gain momentum in the southern suburbs of Johannesburg, where the average price of large homes has risen 11% to R1,73m in the past year, and the average price of a medium-size home has risen only 3,5% to R972 000.
Meanwhile, the Absa figures also show that Cape Town is currently the most expensive city in which to buy property, with an overall average home price of R1,72m for the past 12 months. The average price for the northern suburbs of Johannesburg was higher, at R1,78m, but the average for the city as a whole was only R1,45m.
By contrast, the average price in Pretoria was R1,51m and that in Bloemfontein R1,46m – which indicates, says Davel, that many of those considering a move out of Johannesburg for work or personal reasons would also be well-advised to consider downsizing somewhat unless they want their monthly bond repayments to increase.
“On the other hand, if you are selling a big house in order to retire, it might be a good idea at this stage to research moving to another city or province where the proceeds of your sale will go further in the purchase of a new small or medium-size property.”