Tony Clarke, Managing Director of Rawson Properties, was recently interviewed for 'The Home Channel' and gave his listeners the benefit of his countrywide experience '“ and his 15 years in property marketing.
'What we are now seeing,' said Clarke, 'is the long awaited stabilising of SA property prices. The boom of the last few years has enabled prices to catch up with international levels '“ although we still have a fair way to go. But this stabilisation (with 74% of properties now sold below the asking price) has led to more realistic prices and increased buyers interest.
Buyers, said Clarke, are now putting in bids 15 to 20% below the asking price and are less urgent to conclude deals because their options have increased. The implementation of the Credit Act in June will, he said, further strengthen buyers positions because some bond applicants will find that they do not qualify for bonds at the level they had anticipated.
Now, said Clarke, is a good time to invest in the residential market, not only because good properties are scarce but because building costs, rising at 17% per annum, are making the cost of new homes more and more expensive. New homes will cost twice as much five years from now.
'Over the last 30 years, economic cycles have sent property prices up and down - but property has had an average annual growth of 18% and remains the safest of all investments,' he said.
The Western Cape market, Clarke believes, is looking strong, despite a slow-down in sales.
Quoting ABSA figures, he said, small properties in the Western Cape now have an average price of R759 604, medium-sized bracket properties an average value of R 1,04 million and large-sized properties an average of R1,5 million. In all categories, he said, these prices are significantly higher than the SA national averages. The homes at the lower end of the market are still appreciating fastest (by 18% per annum).
Looking ahead, Clarke said that the best buys right now in Cape Town are in the fringe areas of the traditionally high-priced suburbs like Plumstead , Kirstenhof, Wynberg and Observatory. Coming off a low base, these are appreciating fastest as a result of a demand from fast-growing upwardly mobile new buyers.
Residential developments and renovated homes in and around commercial centres, particularly the CBD of Cape Town, he said, are also booming because prices there are still 'reasonable' and people have grown tired of the time wastage of commuting.
In Johannesburg, he said, the investment hotspot is the 2010 sport precincts such as, Ellis Park, which is now undergoing an urban rejuvenation of unprecedented proportions.
