A few years ago the Rawson Properties franchise and other estate agencies in Bellville were recording some of the highest sales per month. Today, says Morne Veer, who has owned this franchise since 2002, most agencies’ sales figures are under half of what they were during the boom time.
Nevertheless, he says, his team is still achieving four to five sales each month and is now seeing prices stabilizing. Price falls, he says, are now very definitely a thing of the past and certain properties’ values in sought-after areas such as Boston, Chrismar, La Rochelle and surrounding areas are increasing rapidly on year-on-year basis.
“A fairly high percentage of sales activity in the past,” said Veer, “was the result of owners steadily upgrading. Today, with salary increases leveling off and the National Credit Act, making it difficult to obtain larger mortgage bonds, many owners can no longer afford to move to bigger or better homes and areas – instead they use what spare cash they have on upgrading their existing homes or they simply sit tight.”
Prices in Bellville, said Veer, are still genuinely affordable, particularly if the buyer stays below the N1 freeway. Above this line 25% to 30% increases per square metre immediately kick in, but below the N1 it is still possible to get an average three bedroom on a 500m2 plot for between R850 000 and R1 million, which, added Veer, is ‘amazing’ for a home so conveniently placed to serve the Bellville and Cape Town CBD areas.
“Sixty percent of all homes sold in Bellville are still below R1 million and almost without exception they are great value in today’s market,” he said.
This area, added Tony Clarke, Managing Director of the Rawson Property Group, is in many respects typical of urban residential precincts throughout South Africa in that the slowdown in sales has been complemented by a big upswing in rentals and the prices that rental properties can command. In the Rawson Properties Bellville rental portfolio there are certain homes that a year ago rented for R4, 500 to R5, 000 per month which are now easily obtaining rentals of R6, 500 per month. Similarly, homes that used to rent at R6, 500 per month last year are now going from R8, 500 to R9, 000 per month.
“Certainly in my experience,” said Veer, “I have never before seen rents rise so fast. The general short supply of stock, the new tendency to hold onto homes rather than to upgrade, the lack of land for development coupled with the increasing attractive rentals seem highly likely to send prices up by some 10% before the middle of next year.
“The tough economic conditions, which have mitigated adjacent fast price rises,” he said, “will no doubt still be with us, but the plain truth is that Bellville is so affordable and so conveniently sited that it will always suit a fairly significant proportion of people living in the Northern Suburbs.”
