Driven by demand from upcountry buyers, the residential market in the exclusive enclave of Upper Constantia has remained defiant of the economic downturn, with the gap between asking and selling price as well as time spent on the market being considerably lower during the first six months of 2016 than the same period last year.
This is according to Joanna Thomas, Select Area Specialist for Lew Geffen Sotheby’s International Realty in Constantia Upper, who says: “Between January and the end of May last year, the average time properties remained on the market was 141 days, selling for 12% less than the asking price”.
“During the same period this year, we saw the average time spent on the market drop to 122 days and the average gap between asking and selling price narrowed to 7.9%.”
Citing Propstats data, she adds: “The market has remained consistently strong during the past six years, with the average difference between marketed and sale price decreasing yearly. The notable discrepancy of 19% in 2010 reduced to 15.1% in 2013 and 11.8% in 2014; shrinking even further to 9.8% by the end of 2015.”
Thomas says that there is no doubt that that the influx of people from other provinces into the Cape has boosted demand, with up to 65% of all their recent sales being to upcountry buyers.
“Gauteng investors still account for the majority of upcountry buyers but we are fielding an increasing number of queries from KwaZulu Natal buyers who are also drawn by the suburb’s lower crime rates, better municipal services, proximity to good schools and authentic country lifestyle.”
Thomas says the Lew Geffen Sotheby’s International Realty team has experienced a flurry of sales in the area over the past six months.
“Year to date we are leading the Constantia Upper market in both sales turnover (Rand value) and number of units sold and we are currently working on a several transactions which we hope to conclude shortly.”
Arnold Maritz, Southern Suburbs Co-Principal for Lew Geffen Sothebys International Realty, says the buoyancy is being driven by the very active lower to mid-market segment, relative to the overall pricing in the area.
“Around 80% of sales in Constantia Upper are properties priced below R13.5m, with the highest demand being for homes in security estates priced between R6m and R8.5m. There is also growing interest in older freestanding homes in need of renovation which can occasionally still be found for around R7.5m”.
Lew Geffen, Chairman of Lew Geffen Sotheby’s International Realty says there has also been a noticeable rise in the numbers of investors buying property to live in at a later stage, which has resulted in a surge of homes on the rental market.
“Savvy investors are realizing that it makes sense to buy sooner rather than later as property prices are unlikely to drop in the foreseeable future. And, with property values consistently growing at above inflation rates, buying property in one of the country’s strongest markets is an excellent investment in uncertain socio-economic times.”
Citing Lightstone data, Geffen says that the average year-on-year percentage increase in property value in Constantia Upper since 2010 equates to almost 8% per annum over five years, with a sharp spike over the past two years, when the average selling price increased by 15.87% between 2013 and 2014, and by 17.1% between 2014 and 2015.
Thomas says that the suburb’s appeal is very evident in the fact that more than half of properties in Constantia Upper have been owned by the same people continuously for 11 years or longer, a further 15% have not transferred ownership for between eight and 10 years.
“There are very few areas in the country which offer the same stability and unique drawcards as Constantia. Residents not only enjoy the convenience of an established infrastructure and access to first rate amenities, but also enjoy the privilege of an unparalleled lifestyle”.
“Constantia is home to abundant stretches of protected greenbelt and outdoor enthusiasts are spoilt for choice with myriad facilities quite literally on their doorsteps. There are endless kilometres of biking and hiking trails as well as a number of well-maintained parks.”
Constantia’s trump card, however, is the peace of mind its effective security initiative affords residents.
“Crime has dropped dramatically since the Constantia Crime Watch was formed in collaboration with private security companies and SAPS, utilising high-tech features such as CCTV cameras and thermal imaging.”