The economic and political uncertainties of the past few months have been no deterrent to big-ticket property buyers in Johannesburg’s plush northern suburbs, says Lew Geffen, chairman of Sotheby’s International Realty in Johannesburg.
“In fact,” he says, “this sector of the market really caught fire in October and our Johannesburg offices had an all-time record sales month, with more than R100m worth of sales concluded just in the R6m to R10m price bracket.”
Among the high-end homes sold by Sotheby’s International realty in October were one in Atholl (R7,5m), two in Houghton (R6m and R8,2m), two in Hurlingham (R6,2m and R6,5m), one in Melrose (R9,45m), two in Morningside (R7m and R9m) and one in Sandhurst (R7,5m). The majority of buyers were South Africans buying homes for their own use.
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Asked about the likely reasons for this sales surge, Geffen says that buyers in this sector of the market are increasingly confident that the recession is over and that the economy is set to start gaining momentum in the first half of next year.
“They also foresee that rising demand will start to drive prices up from their current lows within the next 12 months or so, and are taking the opportunity to upgrade to bigger and more luxurious properties before this happens. What is more, they are prepared to stake their own money on this view. On average, our buyers in the October big-ticket transactions paid 60% of the purchase price in cash and required bonds for just 40%. This contrasts sharply with the situation in the lower price categories where most buyers require more than 80% of the purchase price and banks are still very cautious about lending.”
Meanwhile, Geffen says, stock availability has improved at the upper end of the market because many property owners who have been sitting on the fence for the past four years are now also keen to move on with their lives - and ready to sell at market-related prices so that they can upgrade in their turn.