What does 2011 hold in store
As the year enters its final phase and the country prepares to kick into holiday mode, conditions in the Cape Town metro property market are proving to be positive, if somewhat erratic. Says Pam Golding Properties’ MD for the Western Cape metro region, Laurie Wener: “We are certainly seeing more upbeat market sentiment this year compared with the same period last year. However, while steady sales are being achieved at present, it seems to be a case of one week busy, the next quiet, for no apparent reason. However overall the signs are positive, and certainly for PGP the Western Cape metro area is 23 percent ahead of sales turnover figures for the same period in 2009. If we can sustain this pace into 2011 and achieve similar growth by the end of next year, we will be on track.”
Wener expects 2011 to be a year of slow but steady growth in the local property market, and says market sentiment has been further boosted by the latest cut in interest rates, announced by the Reserve Bank on 18 November. . “For those with existing bonds, the latest cut means a further reduction in bond repayments, and therefore a boost to disposable income – a welcome bonus ahead of the festive season. However, for new home buyers, the lower interest rate environment will have only limited benefit, as mortgages remain difficult to obtain. And overall market recovery is going to be determined by a great deal more than just the interest rate climate – other factors such as employment prospects, the ability of small businesses to grow, and recovery from the recession, will be much more significant.”
One of the notable trends in the Western Cape metro area at present is the relatively low number of distressed sales taking place. Wener says the figure for the greater Cape Town area is very low when compared to the number of distressed sellers elsewhere in the country. Another trend is the continued steady purchasing of properties in the price bracket from R650 000 to R2 million, for cash investment purposes. “The lower interest rates should further encourage this pattern,” she says, “due to lower yields on bank cash deposits.”
Another category of buyer which becomes particularly active at this time of year is that of parents seeking student accommodation for their children next year. Wener says PGP already has a number of clients looking for properties to buy or let in this category, and anticipates that interest will continue to rise as up-country residents come down to the Cape for their annual holidays.
Despite the somewhat erratic conditions, PGP has recorded a number of significant sales in recent weeks, including two bungalows in Clifton sold for R18 million and R20.5 million respectively, as well as a knock-down home in the same suburb sold in one weekend for R11.5 million – with two buyers in competition. Two homes in Upper Claremont were also sold for over R8 million, to local cash buyers. The suburb of Newlands also reported exceptional activity in November, concluding five sales to the combined value of R17.75 million.
Wener says PGP currently has a wide range of stock on offer, encompassing all areas of the metro region and all price brackets. “We are proud to offer an excellent portfolio of exclusive mandates to suit all needs and tastes,” she concludes, “and are quietly confident that the current slow market recovery will continue to gather pace into 2011.”
For more information, contact Laurie Wener on 021 673 4200 or laurie.wener@pamgolding.co.za.
Press Office