Two of the questions which he most dislikes having to try and answer in the current economic climate, said Bill Rawson, Chairman of the Rawson Property Group, is, “Is this the right time to be buying upmarket property?” and “Can we expect a revival in the prices of the very expensive properties, e.g. those priced above R20 million?”
His answer, said Rawson, is always cautious because, while there is now evidence that prices in upper level property are beginning to stabilize, buying activity at this level is still minimal – and there are no signs of price improvements in the upper brackets as yet.
“If I am to be honest with my clients, I have to tell them that, at this stage, if they choose to buy high priced property it must be as a result of a lifestyle decision: they must buy because they really want the home, not with the hope of selling it at a profit in the next three to four years.”
The value to be obtained in upper middle and upper brackets homes, i.e. at any home priced above R3 million, said Rawson, tends to be very good indeed.
This, he said, is especially evident if one looks at one of the Cape’s most popular upmarket Southern Suburbs areas, Constantia. Here in 2012 the average price of freehold homes sold was R5,7 million. This year the average has dropped to R4,7 million.
Another example of the drastic drops which have taken place, said Rawson, is an apartment in the V&A Waterfront which is now on the market through the Rawson Property Group’s Hout Bay franchise at a price of R3,950,000. This same apartment was sold only six years ago to the current owner, now in financial difficulties, at R7,5 million.
For those interested in this apartment, its main features include very spacious living and entertainment areas in a minimalist style, a fully equipped modern kitchen with Caesarstone countertops and Miele appliances, central air-conditioning and under floor heating, two secure private underground parking bays and a store room.
Rawson said that he believed that an apartment of this type in the V&A Waterfront can rent out at R3,000 per day over the holiday periods, i.e. over the December/January and March/April holiday seasons.
“Even at the much reduced price,” said Rawson, “it is possible that the sellers of this apartment may still have difficulty in finding a buyer. However, what is true I am sure is that further significant price drops are no longer on the cards. Those buying into these and similar properties are, I believe, now getting in at the lowest possible level and, taking the long-term view, these prices will, in five to ten years’ time, look very reasonable indeed.
