Throughout East London, severe stock shortages are being experienced by most estate agents in the residential property market at the moment, says Penny McCarlie, franchisee for one of the two Rawson Property Group franchises operating in the city.
“The current market conditions are more favourable to the sellers, who no longer have to cut their prices to the same extent they did in the 2009 to 2011 recessionary period. In view of the big demand today, prices are, at last, starting to rise at an annualised rate of around 15%,” says McCarlie.
In view of this huge demand, she adds, she and her colleagues Sanet van der Merwe and Vuyo Kayula, working in an associate Rawson Property Group franchise, are now predicting that sellers will return to the market and that the recent price rises will definitely continue.
“The big demand now,” says McCarlie, “is in the R1 million to R1,5 million bracket and the areas where such homes sell fastest are Beacon Bay, Vincent and Berea.”
However, demand for more expensive homes is by no means dead, adds McCarlie, and 30% of her franchise’s stock is, in fact, priced above R1,5 million and she has just received a shared mandate for a home valued at R6,2 million.
“Sales at this level are slow, but again I believe we have reached a turning point and the upswing that we have all been waiting is now becoming a reality.”
Below the R1 million mark there is also steadily increasing activity, focused mostly on the vast Mdantsane informal settlement area where McCarlie has a dedicated agent, Cloudia, who looks after this area. These properties, says McCarlie, can be priced at anything from R90,000 to R800,000. This market, she says, looks as if it will perform as well, if not better, than the middle category market – and, if past patterns are to be repeated, some 5% of homeowners from this district will, in fact, move into the more expensive middle bracket homes each year from now on.
Unlike many estate agents, McCarlie says that her five agent team does not have great difficulty in getting bonds for their clients because they work closely with them and analyse their current financial position, thereby ensuring that their offers are in the right price bracket. McCarlie admits, however, that a great many clients are always reluctant to settle for a lower priced unit when analysis has shown that their bond application above a certain level is likely to be rejected. This, she says, is one reason why the other East London franchise, Rawson Beacon Bay, runs a rental portfolio and is doing particularly well on rentals in this area.
In view of her bullish predictions, McCarlie and her team expect to be selling an increasing number of homes by the end of this year.
“I do believe,” she says, “that we are now definitely entering a more exciting phase, one in which, as I have indicated, stock levels will rise again and values will at last keep pace with, if not beat, the inflation rates. The traditional property message, ‘now is the right time to take the plunge’, is especially valid now and those who take this advice will find that they have invested in a steadily rising market.”
