Those who believe that the property market in the more expensive residential areas of South Africa has still to recover from the global recession should take a look at what is happening in the residential property market in Johannesburg’s more affluent Northern Suburbs.
Ben Cilliers who is the Rawson Property Group’s franchisee for Morningside and the Sandton CBD, said recently that his team of ten agents is currently selling 10 to 12 homes per month and if more stock was obtainable could be selling at least 50% more. So confident is he of the market that he is now looking for a further ten agents whom he says will do well in the market that as yet shows no signs of falling away.
The property market in his area, said Cilliers, is unusual in that 80% of the buyers are paying in cash and 70% of his team’s bond applicants are successful in getting finance.
In many areas, said Cilliers, sales are held back by the fact that, although it is very easy to sell, it can be difficult to find replacement homes at a reasonable price. Home owners, he said, are also very aware that if they choose to rent rather than sell they can bring in substantial rentals monthly: one sectional title unit his team sold for R900,000 is now renting at R12,000 per month, while a good four bedroom home in, say, Inanda, will attract a rental of at least R35,000 per month.
In Morningside, a traditionally affluent area where the average household incomes are calculated by the Deeds Office to be between R51,000 and R67,000 per month, even the smaller sectional title unit will come onto the market at R1,5 million.
“Over the last year,” said Cilliers, “Morningside sectional title units have on average increased in value by R100,000, while full title and gated estates homes have, on average, risen in value by R300,000.”
These, he said, are mostly selling in the R3,6 million to R4,3 million bracket, but, as one would expect of so prominent an area, it has had more than its fair share of homes priced in the R15 million plus bracket.
In Sandton, said Cilliers, sectional title units have risen by 40% in one year, most of the sales now being in the R1,8 million to R3,2 million bracket, while on freehold homes prices have risen on average by 12% and most of those now selling are in the R3 million to R8 million bracket, again with many grander homes on the market at anything up to R40 million or R50 million.
“In our franchise,” said Cilliers, “any accurately priced home in these areas will today sell within three days, an almost unprecedented situation for South Africa, and we have had a fair number which have sold within 24 hours of coming onto our books. Just recently one was sold within three hours of coming onto the market.”
The question is, therefore, can this boom last? Are prices now so inflated that the bubble must at some stage burst?
Cilliers does not believe that this will happen. As he sees it, the intensely strong demand will ensure that prices will continue to rise, making any purchase in this area now a very good one indeed.
For further information contact Ben Cilliers on (011) 783 1098 or email ben.c@rawson.co.za.
