Mid-year market update - Rondebosch & Rosebank sectional 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 from 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 effective translating to deflating prices.
Looking at the Sectional Title market in the Rondebosch and Rosebank areas for the first six months of this year compared to 2018, it is clear that the market is reflecting the economic pressure. Overall sales have practically halved to just 13 units sold in Rondebosch to the combined value of R29,535,000.
Naturally, the average sales price has been affected and it is down by 24% to R2,271,923. While the bulk of sales have been below R3m, two high value sales were recorded, being R6.5m for a 250sqm unit in Ecklenberg and R3.35m for a 118sqm unit in Gail Court.
We also see that where sellers only had to drop their price by around 4.4% on average in 2018, this increased notably to 7.7% this year. It now takes almost twice as long to sell a sectional title property in Rondebosch with the average time on the market standing at around 12 weeks.
Only one sale of R1,395,000 was recorded for Rosebank for this year, notably down compared to the 6 sectional title units sold last 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 as of 30 June 2019
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Author: Gina Meintjes
