PROPERTY: Market Clawing Its Way Back
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The residential market has picked up significantly in recent weeks with attendances at Century City show houses tripling and buyers returning, says Allen Usher, managing director of Property World, the specialist on-site agency at Century City.
“In the first week of this month (September) we already had six new development sales confirmed totaling just short of R11 million with a further five or six pending which is a huge improvement on previous months. For July and August there were only four confirmed sales and attendances at show houses were minimal. The past two weekends have seen over 50 people, many serious buyers, through the show homes.”
Usher said the market had definitely turned on the back of the latest “surprise” drop in interest rates and the banks starting to relax their lending criteria, particularly for properties under the R1,5million mark, which accounted for about 60% of the current development stock at Century City.
“The past year to 18 months has been particularly difficult period for the residential property market but we suspected that there were still buyers out there but they were just waiting for affordability to kick in. It now has thanks to the lower interest rate environment, greater bank liquidity and the re-introduction of 100% mortgage bonds and as high as 104% for some first time homebuyers.”
He said there was no doubt that consumer confidence was growing and they were confident this was not just a flash in the pan but the start of a sustainable upturn in the market.
“The property market is not unlike other investment sectors in that when the tide turns and the first investors come back in there is a snowball effect with others following in increasing numbers. We expect to be achieving an average of at least eight new development sales a month for the foreseeable future which will quickly mop up our existing stock and allow the Century City developer, Rabie Property Group, to push the button on new planned developments. In fact they have three new residential developments planned and earmarked to be launched in 2010.”
He said that Century City, which was named the top middle income housing development in South Africa in an independent survey undertaken by Finweek earlier this year, was expected to continue to outperform the market as properties, both to buy and to let, remained in strong demand.
“This is due to the precinct’s central location, its well maintained environment, its easy access to world-class amenities including Canal Walk shopping centre, gyms, spas and Intaka Island, and its award-winning nature conservation area to name just a few.”
Usher, who is also MD of Usher Realtors, which specializes in Atlantic Beach, said that the upturn in the market was however not just limited to Century City nor to properties under R1,5million but was also evident at the top end of the market.
“At Atlantic Beach we did R20m of sales in August which was equivalent to 60% of the total sales in the previous year. This augurs well for the year ahead.”
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