Mid-year market update - Constantia Upper
Category Market Update
The 25 basis points' cut in the interest rate should be good news for buyers as it will further add to the affordability of property in general and should encourage more buyers to get back into the market.
After some volatility during the early months of the year, the latest FNB Property Barometer points to some stability returning to the market. It notes that confidence in the market is back to that experienced during the last quarter of 2018 and higher compared to the second quarter of 2018.
Price growth, however, continues to experience significant downward pressure. The latest Cape Town Sub-Regional House Price data from FNB shows that overall growth for the metro has slowed to just 1.2% from 3.2% in 2018 with many areas in fact beginning to show deflation.
The Southern Suburbs as a whole has seen a notable decline with the average price growth down from 0.5% in 2018 to -2.4% this year; thus effectively translating to deflating prices.
Looking at the Constantia Upper area for the first six months of this year compared to 2018, we can clearly observe that the market is reflecting the economic pressure. The area is down by about 42% in overall sales in rand-value terms and about 41% down in terms of the number of sales recorded.
Interestingly, the average sales price for this year stands at around R12.3m, about 6% up on last year's R11.6, attributed to more high value sales this year which has pushed up the average price. Some five sales have been recorded above R15m ranging to a highest price of R34m, slighted up on last year's highest price of R32.5m.
Naturally, the slow market conditions have resulted in properties taking about 60 days longer to sell with the time on the market now at around 25 weeks (or 5,5 months) compared to 16 weeks (or 3,5 months) in 2018. Where sellers only had to cut their asking prices by around 7% on average, this has increased notably to around 11% this year.
Generally, the outlook for sellers remains cautious and it is unlikely to improve to any notable degree this year. Conditions for buyers on the other hand, are particularly favourable and we expect that buyers will start taking advantage of the opportunities in the market. There is now an excellent selection of stock to choose from, most at similar price levels to last year.
With higher stock levels we are beginning to see more sellers willing to negotiate and buyers should therefore not hesitate to put in offers if they are serious about getting into the market right now.
Note - market statistics based on Propstats data
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Author: Gina Meintjes
