Mid-year market update - Rondebosch full title
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. The implication for sellers is that they will need to adjust their price expectations in line with the market if they want to attract buyer interest.
Looking at the Rondebosch Full Title property market for the first six months of this year compared to 2018, it is evident that the market is reflecting the economic pressure, but we can also see that well-priced properties are still selling. Rondebosch remaining in high demand for the excellent location, proximity to top schools and amenities.
The market is down by about 41% in terms of the total rand-value of sales generated while the number of properties sold is down by about 48% for this year compared to last year.
Interestingly, the average sales price which stands at around R5,5m (R5,538,885) is about 14% higher compared to last year's R4,8m (R4,848,720). This is attributable to a few high value sales concluded this year which impacted the average sales price.
There were for example 10 sales above R5m, three of which were above R10m, ranging from R10m in Silwood Road to a R12m sale in Kilgetty Road and a R13m sale in Pitlochry Road, the latter being the highest price achieved this year.
Naturally, the slow market conditions have resulted in properties taking longer to sell. The time on the market is now at around 22 weeks (or 5 months) compared to 12 weeks (or 3 months) in 2018. Where sellers only had to cut their asking prices by around 9.1% on average, this has increased notably to around 14.4% this year. This is an indication that buyers are looking for good value.
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
