Every prediction made a year or two ago about Observatory’s likely property price rises has now been shown to be far too conservative, says Craig Gilfillan, the Rawson Property Group’s franchisee for this area (and Pinelands). What is more, he says, Woodstock property prices are following the same upward trend.
Observatory which towards the end of 2013 sold at R1,1 million or R1,2 million,” said Gilfillan, “are now selling at 1,5 million – or even more. What is noticeable is that as yet we can see no sign of these price rises, which on average have risen by 15% this year, ending, although it does seem probable that they will rise slower towards the end of this year because certain keen potential buyers are now finding it necessary to look elsewhere.”
When a home comes onto his stock list, said Gilfillan, it will almost always sell within ten days and within 5% of the asking price.
The Observatory rental market, he said, is performing equally well. His franchise now manages about 110 units and this year they have seen new rentals being negotiated at increases of 10% to 12%. Bachelor apartments can in most cases command a rental of R3,500 or more per month, a single bedroom unit will probably rent out at between R4,500 and R5,000 per month and large apartments and homes can be priced at anything from R10,000 to R15,000 or more per month.
Buy-to-rent buyers and others, said Gilfillan, are always on the lookout for homes with fixer-upper potential, but these are today not easily found: the vast majority of Observatory homes have already been renovated at some stage in their history. Landlords are, however, he said, sometimes often a little too reluctant to keep their units in top notch condition which today’s rentals would justify.
Good examples of what has happened in the Observatory home market this year are two homes, both sold recently by the Rawson Observatory team. Both homes at various stages have been comprehensively renovated internally and to a lesser extent externally.
The homes are:
- A single storey three bedroom, two bathroom home on a 460 m2 plot. This home, which has a spacious open-plan living and dining area, a very well equipped kitchen and a garden (not that usual for Observatory) was sold for R2,950,000, i.e. within 5% of the asking price.
- A fairly small two bedroom, one bathroom cottage on 180 m2. This home, which has an attractive living/dining area, sold for R1,460,000.
Just come onto the stock list in Observatory is a home with four bedrooms, a sun filled living/dining area, a garage and a private enclosed garden. Priced reasonably to conform with today’s market conditions, the home has a sales tag of R2,595,000. Gilfillan said that a year or so ago such a home would probably have come to the market at R1,8 million/R1,9 million.
In a scenario where stock is in such short supply and prices are continuing to rise, what advice does Gilfillan have for the prospective buyer?
“The only sensible thing one can say,” he said, “is that although price rises may be less spectacular in the year to come, they will certainly continue. Hesitation in buying will, therefore, make life more difficult for the buyer. If raising finance is a problem, it may help to discuss with an experienced estate agent some of the alternative ways of financing a home purchase for which a full bond may not be available.”
