Although the Northern regions of the country have generally experienced continued demand for property in 2016, there are also many areas that have seen a drop in sales activity, properties taking longer to sell and more cautious buyers and sellers entering the market.
The reasons for the market being in flux includes the political and economic situation, interest rate hikes, raised transfer duties and the fear of possible job losses. In some instances home owners would rather renovate their existing homes than to buy a new property, but that being said sales volumes are steady, albeit down in some areas.
Another reason for less people investing in property also has a lot to do with pricing and especially overpricing. Activity in the most active segment of the market (homes priced between R800 000 and R2 million) remains robust despite the negative market conditions, but higher priced property have taken a knock in some areas.
It does however remain very possible to sell a property with almost any price tag within as little as a day as has been demonstrated by many Seeff branches. Provided the price, location and conditions are right, the offers come in fast and often at the full asking price.
Most Seeff principles in the North also agree that there is still a big demand for freehold property amidst speculation that this type of living may become outdated, but that correct pricing is once again tantamount. First time home buyers and investors generally buy sectional title property, but end-users and families often prefer freehold if given the choice.
Property in estates, generally priced from R1.5 million to R20 million, sells fast and buyers are happy to pay a premium price for the security aspect. This type of property also has better returns (in some areas like Centurion even up to 10%) than other property.
Although not as considerable, demand exists for super expensive trophy homes priced up to R50 million in areas like Sandton and Pretoria East as reflected in figures from Lightstone that around 30 properties priced at R20 million and higher have been sold in Sandton since 2013.
Cash buyers are prevalent in areas like Sandton where many sectional title properties are purchased cash, but other areas like Nelspruit for instance is also experiencing this where a property of R4.5m was recently bought cash. In Nelspruit specifically there is an increase in the number of cash buyers – the figure presently being about 30%.
The demand for rental property also remains high, especially for two bedroom homes that are pet friendly and priced below R10 000 per month, but some corporate rentals can fetch prices of up to R80 000 per month.
While many Seeff branches in the larger metro areas are trading up on last year, mining towns such as Rustenburg, Witbank, Middelburg and Secunda are trading down due to mines closing down job and job losses.
Few areas have an oversupply of rental stock in medium price ranges, but a town like Secunda for instance have many vacant homes due to uncertainty in the market. This area – just like some other areas further away from the metros – needs new and modern sectional title complexes to accommodate the budget of especially first time buyers.
Nelspruit for example also needs new developments to alleviate the stock shortages and rental demand, but this is due to stock in the area being severely under pressure and demand outstripping supply.
In Middelburg the market is also uncertain due to mines restructuring and people losing their jobs and as a result listings have gone up as owners are downsizing. This town currently has a buyer’s market with a vast array of stock, but this is only expected to last until the mines can offer more job security.
In conclusion it seems that even though times are tough, property sales are concluded daily at many of Seeff’s branches and rental demand remains high provided that the location, condition and price is right.