Property market update
Category Newsletter: Article
With the busier summer selling and rental season now upon us, it is a good time to pause and reflect on how the property market is faring this year.
Although the recent 2.5% GPD growth figures have provided some positive news, the general consensus from economists remains cautious and the outlook for the economy is still poor. Following the interest rate cut, we were somewhat disappointed with no further rate cut at the latest Reserve Bank Monetary Policy Committee meeting.
For sellers and buyers, caution remains the order of the day. There has been a notable decline in the overall number of properties that have sold across the city, including the Atlantic Seaboard and City Bowl this year compared to last year. In some areas, overall volumes are down since last year by as much as 15% and even more. At the same time, fewer very high priced properties are selling.
The middle sector of the market however, continues to be fairly active as there will always be people who have to or want to buy property and so, while quieter, there is always activity. The question for sellers is always just how serious they are about selling. If the answer is yes, then be sure to keep your price expectations in line.
The latest FNB Property Barometer for the Western Cape continues to state that it is the best performing property market in the country and while it is no longer booming, it is also not a bust, but appears to still be in a fair state.
The barometer also highlights the good price growth in the Western Cape relative to the rest of the country. It states that over the past five years, the Western Cape’s cumulative house price inflation has measured 53.7%, twice as much as Gauteng (24.7%) and significantly higher than KZN (30.2%) and the Eastern Cape (26.6%).
FNB also again confirms that the Cape property market continues to attract an influx of buyers (and tenants) from other provinces who are looking to relocate to the city.
Despite a weaker economy the Cape metro also continues to attract some of the highest average transaction prices in the country. The latest deeds office data, puts the full title transaction price at R2.8m and for sectional title at R2.4m, based on transactions for the last three months.
While the economy is having an inevitable effect on the market, it is still in a reasonably healthy state, although properties are taking longer to sell and prices are under pressure.
Author: Coastal Property Group
