Earlier this year, Lizette Joubert, franchisee for the Rawson Properties Paarl franchise, said that 2012 would turn out to be a watershed year for housing in her area, one in which price drops became a thing of the past and the first signs of real price growth would become evident to all. At the time, she qualified her comments by saying that as long as most people can remember, Paarl property has always been more stable and more recession resistant than that of almost all other Western Cape towns or districts.
This week, Joubert said that what she had predicted is now becoming evident across the board.
“In the last eight months,” she said, “our sales have increased by over 15%. Particularly relevant is the fact that in the upper brackets, i.e. R2, 150,000 and above, the sales have been four times as high as they were in any previous period since 2007. In addition, our waiting times are now on average down to nine weeks (as against the national average of 17 weeks) and we are finding that any accurately priced property will sell in four to six weeks. The current difference between our asking and our achieved sales prices is now just under 10% and is therefore in line with the national average.
“Furthermore, in the lowest priced bracket, i.e. below R1 million, sales have been so good that we are now short of stock and, even though we have qualified buyers waiting in the wings for opportunities, this situation must inevitably lead to price rises in this category, if not immediately, certainly in the foreseeable future.”
Quoting a recent (up-to-date) FNB residential home survey on Paarl, Joubert showed that this year the average price of full title homes sold in Paarl had risen to just over R1 million (R1,080,000), while the average price for sectional title homes had been just under R500,000. The full title average price, said Joubert, is approximately six times as great as that of 2001, while the sectional title price is fractionally lower than that year.
In both categories, the latest square metre building costs, added Joubert, are some 10% to 15% below those of 2011. This, she said, would seem to indicate that developers should be able to get going again, even though in Paarl there is still a price differential of some 26% between new and second hand units.
Although this year has seen a marked swing in upper bracket sales, the big demand (45% of the total), said Joubert, is still in the R1 million to R2 million bracket. Here, again, average prices are well above the national figure, which is around R890, 000. In this category, she said, so far this year Rawson Properties’ Paarl sales have been 15% higher than those in the same period last year and in the R2 million to R3,5 million bracket, 10% of the sales were recorded. The sub-R1 million bracket, previously so buoyant, is now responsible for only 40% of total Paarl sales.
Relating these figures to home sizes, Joubert said that just over 60% of all sales were in the 500 m2 to 1,000 m2 and 1,000 m2 to 1,500 m2 brackets.
Asked to give good examples of recent sales in the most expensive homes at what she considers to be ‘reasonable’ prices, Joubert mentioned:
- A Groenvallei home in Foxglove Street, which was sold for R2, 150,000. This 301 m2 home has four bedrooms, two bathrooms, an open plan living/dining area, a study and two garages. The garden has a pool and an outdoor braai area, which is complemented by an indoor braai area in its own room. The plot size is 1,271 m2.
- A double storey home in Jacques Street in central Paarl. Priced at R2, 590,000, this home sold in two days – for R2, 500,000. This house, said Joubert, is an excellent investment for a home with 350 m2 of floor area on a plot of 1,556 m2. The home has five bedrooms, three bathrooms, a double volume entrance hall and living area, a family room, a study, a storeroom and double garage.
In the lower price brackets, Rawson Properties Paarl have also just sold a 238 m2 home in Dorp Street, which is zoned for business use, for R1,080,000. Again, said Joubert, this was a good buy as the rent here is likely to be well over R11, 000 per month.
“Prices like these,” said Joubert, “are very definitely still slanted in the buyer’s favour, but are satisfactory in the current market. However those who think that such prices will continue for the foreseeable are, in my view, very mistaken. They should be acting now to secure properties while interest rates and prices are at these low levels. Based on the seven years’ experience in our franchise, my team and I must definitely warn that the current conditions will not last much longer.”
