After years of phenomenal growth, Cape Town’s property market is showing signs of a slowdown and the prestigious Atlantic Seaboard has also been affected. With more stock on the market, serious buyers are in a good negotiating position.
Cape Town’s Atlantic Seaboard is now in a buyers’ market phase according to Seeff’s agents in the area. The latest Propstats data shows that the sectional title sector of the market is down year-on-year by about 34% in value and 41% in volume terms for the first few months to early April.
The latest FNB Property Barometer also points to a weak Cape market and this is reflected in the Propstats figures. Where the market generated almost R1bn in sectional title sales by early April last year, it has only managed just over R600 million this year, says Ian Slot, MD for Seeff Atlantic Seaboard & City Bowl. The price gap has almost doubled from 5.4% to 10.2% with recent sales concluded at anything between 10.7% and 28.6% below the asking prices.
It now takes almost twice as long to sell a property with the time on the market stretching from 6 weeks last year to over 11 weeks. Adrian Mauerberger and Cecily Sher, luxury sectional title specialists note that stock has increased notably, but sellers are still not motivated enough to drop their prices sufficiently to encourage buyers to put pen to paper.
A quick glance at Private Property shows that there are well over 1200 sectional title property listings on the Atlantic Seaboard while only 88 sales were recorded on Propstats for this year to early April.
The demand in the luxury sector is mostly in the R5m-R10m range according to Mauerberger and Sher who note further that it is mostly own-use buyers looking to scale down. Semigration demand has dropped significantly while this market has never really attracted foreign and investment buyers.
Right now, it is only sellers who are motivated enough to drop their price and ensure that their property offers more than others currently available at a lower price that will sell, add the agents.
Bryan Ginsburg and Hilary Biccari, who specialise in sales below R4.5m advise that this portion of the market comprise about half of all activity, but it is also seeing a drastic slow-down and a notable increase in stock levels giving buyers much more choice. Although there are still plenty of keen buyers including investment and foreign buyers, they are looking for negotiability from sellers, say the agents.
A draw-back for the area, is that many inexperienced agents are still listing properties at inflated prices. Sellers should note that although there are still plenty of buyers, recent sales concluded in the area show price cuts of 12.8% to as much as 20.4%.
The flipside to the market right now according to Mauerberger and Sher, is that buyers who are pushing too hard for a bargain buy, may miss the boat and will end up having to buy as the market start its upswing. Sectional title property on the Atlantic Seaboard is seen as an excellent investment and has achieved some of the best capital appreciation rates during boom times. If you are serious about buying in the area, you would not want to miss out on a great opportunity, they say.
Sectional title property offers low maintenance and upkeep, a major draw-card in light of the water crisis according to the agents. The lock-up-and-go lifestyle enables buyers to travel more freely. This property class is also very popular for rentals, thus adding to investment proposition.
Ginsburg and Biccari note that motivated sellers are doing business right now and there is a shift with more sellers open to negotiation on their prices making it an excellent time to buy on the Atlantic Seaboard.
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