The near-recession conditions now being experienced in the SA residential property sector are very much in evidence at Rawson Properties Goodwood franchise, says Lee Ross, who, after a period as joint franchisee with his father Ivan, took complete control of the franchise in 2005. He has now had 14 years property experience.
This franchise covers not only Goodwood but also Kensington, Maitland, Factreton and Ruyterwacht. Throughout these areas, says Ross, house prices have fallen on average by 10,5%, and apartment prices by slightly more. This means that fairly substantial two and three bedroom houses in good repair are available in Goodwood in a R750 000 to R900 000 price range while flats can be had for as little as R400 000.
In Maitland and Ruyterwacht the average house price is even lower (R540 000), in Kensington it goes up to R640 000 and in Factreton to R320 000.
Buyers, said Ross, understand full well that right now they are in a strong position to get a bargain because there have been job losses and salary cuts and many owners are now forced to sell. (Those who bought over two years ago, he says, are still seeing a profit but those who bought more recently often have to accept a loss and a deal with the bond issuers to pay it off.)
'In many cases,' said Ross, 'sellers are accepting almost ludicrously low offers '“ so now is the bargain hunters time'
Like certain other Rawson franchises, Rosss team had a surprising uptick in December, '“ but, says Ross, every month 'too many' sales are cancelled because the National Credit Act rulings are being applied so strictly.
'Most buyers today have to find a 10 to 15% deposit and pay the costs upfront, which can add 4% to the total sum. In the old days, a bond might well have covered the full loan plus the costs'
While he understands the need for a tightening of credit, said Ross, he feels that computerised formulae have replaced the old, personalised approach which was in many cases better suited to assessing an applicant on an economic borderline.
'In lower middle-class areas like those we serve,' said Ross, 'perhaps 40% of bond applicants will be turned down '“ even though they have solid employment and credit records'
