With South Africa’s home prices now showing a 19,3% increase on the average price of three years ago (and at a 23% increase in the high demand urban areas), buyers today have either to give up plans to own a home or to accept some quite serious compromises initially. However, it will pay people to bite the bullet and follow the second course, says Wayne Albutt, Western Cape Regional Sales Manager for the Rawson Property Group.
“Every buyer,” said Albutt, “comes to the market with a vision of the home he would like to own, but in today’s market he is almost certainly going to have to compromise and scale down his ideas.”
Typically, said Albutt, the younger middle class Cape Town buyer will want a three bedroom home in one of the central Cape Peninsula suburbs, preferably one that is close to the schools of his choice. However, unless he is prepared to drop his standards radically or he is earning well above the average for his age, he will likely be disappointed.
After several weeks of investigation, said Albutt, he will probably either have to consider some other area or agree to buy a less satisfactory, smaller home in the area he does fancy. The latter course, however, very often opens up opportunities for on-going upgrading.
“We have seen buyers going both routes,” said Albutt. “Those, for example, who cannot afford what they want in the Rosebank-Wynberg belt may well opt for Table View or Parklands – or they will agree to accept a further downgrade for a few years in a smaller, less attractive home in the right area (although these are increasingly hard to find), spending any spare cash they accumulate on upgrading.”
Both solutions at the moment assure the buyer of significant capital appreciation within the next two or three years, but it has to be admitted, said Albutt, that the buyer’s lifestyle and that of his family will probably be less congenial than they had hoped for. Nevertheless, he said, the initial sacrifice in these instances is worth making.
