Throughout South Africa estate agents in the more upmarket areas are now reporting that a bottoming out of the market has been apparent for some time and that sale numbers and prices are at last showing a slow but steady improvement.
Nowhere is this more true than in Durban’s Upper Highway and Pinetown areas, says David Hitch, Rawson Properties residential and commercial franchisee for these territories. Residential property in this area, he says, has always been highly sought after because being some 30 km from the Durban CBD, it is easy to commute to the city centre and at the same time Kloof, Gillitts, Hillcrest, Waterfall and the surrounding suburbs, being sited on much higher ground, do not experience the intense heat and humidity of the Durban coastal belt.
Hitch reported that although prices of upmarket homes here took time to see an upturn, they are now moving up at 5% per annum in gated complexes and his agency’s monthly sales are increasing year-on-year by over 35%. Free standing homes, he says, have not yet seen a price increase but are no longer deflating.
Asked to what he attributes this welcome upswing, Hitch said that three factors are clearly identifiable. The first is that among business people there has been a slight but noticeable increase in confidence. The second factor is that people have now often ‘sorted out’ their finances.
“At one stage, although almost all our potential clients could on paper apparently easily afford to buy, they were getting a 43% bond rejection rate from the banks. This was almost always due to poor credit ratings, which in turn were the result of often minor late payments and glitches. Today the average home buyer understands the National Credit Act far better and knows the importance of getting his finances in order before applying for a loan.”
The third factor boosting sales, said Hitch, is that sellers have become ‘a great deal’ more realistic and are more willing to accept a professional agent’s comparative market analysis and valuation. In some cases, he said, it can still take a seller six to nine months to realize that the price that they have been insisting on is not achievable. In general, however, there is greater “realism in the market”. For example, a magnificent Bushveld-type home sold recently in the Kloof area by Rawson Properties agent Charmaine at R2,9 million, was originally put on the market (by another agent) at R3,6 million.
“It has to be appreciated,” said Hitch, “that today’s buyers are far shrewder and more selective than those of three to four years ago and they tend to do a considerable amount of IT research before they even begin to talk to an agent.”
The big demand in his areas, said Hitch, is still for homes priced in the R 1, 2 million to R 1, 8 million range, especially if they are in gated security estates (which account for roughly 40% of all Rawson Properties’ Upper Highway sales), but the 18 residential agents serving the Kloof area and the three agents serving Pinetown can offer units as low as R380, 000 - or as high as R16 million.
Hitch added that although sellers are now more reasonable in their pricing, the desperate/distressed sellers of a year or two ago have largely disappeared. Those selling now, he said, can often afford to be patient and may even take their homes off the market for a year or two. This is one reason why his team is now experiencing stock shortages. Another reason, Hitch pointed out, is that there is very little new land available in his precincts, but this, he predicted, will also help to raise the price of existing properties.
Asked to list three homes which he would regard as excellent value right now, Hitch mentioned:
- A brand new home situated in central Kloof, priced at R3, 475, 000 – offering four bedrooms, four bathrooms, a modern open-plan kitchen fully fitted with new Smeg appliances, full staff accommodation, 3 garages, a pool and a beautifully landscaped indigenous garden.
- An ultra-modern eco-friendly home with its own indigenous garden at Forest Hills. This home has three bedrooms, two bathrooms and two garages and is priced at R2, 350,000.
- A low profile Waterfall home priced at R995, 000. The home has three spacious bedrooms, two bathrooms, two garages, a farm style kitchen, a verandah and a huge covered patio as well as a large and level garden suitable for children to play in.
As mentioned, Hitch’s residential operation is paired by a commercial franchise serving mainly the Pinetown area.
