Market Review: JANUARY TO SEPTEMBER 2021

Market Review: JANUARY TO SEPTEMBER 2021

Category Property Investment

Overview

As we enter the last quarter of 2021 we now have the benefit of being able to look at a broader picture of activity by seeing three-quarters of the calendar year in terms of sales reflecting in the Deeds Office, via CMA Info. As there is always a time lag from the point of sale to legal transfer of around three months on average, sales reflecting in the Deeds Office in quarter one (Q1) of 2021 broadly reflect sales activity from the last quarter or so of 2020. Likewise, Q2 reflects Q1 sales activity and Q3 reflects sales mostly taking place in Q2. So we are looking at sales that were being agreed and signed between the last quarter of 2020 and the mid-year point of 2021, giving us a nine month picture of the market. It remains an unusual market in unusual times, although we can be cautiously optimistic that we are somewhere in the bottom of the property cycle.

There continues, as previously reported, to be an oversupply of properties in the market compared to actual sales.  We have seen a steady increase in buyer enquiries generally across the lower price segments of the market in recent months. We are also seeing enquiries from overseas investors, primarily from North European countries. The increased activity with both local and international buyers is a positive sign, and will hopefully continue in the coming months, as we head through Cape Town summer.

Richard Boxford, Kinesis Property.

NOTE: All table data is extracted from CMA Info which is drawn from the Deeds Office. Additional data source: Property24.

Cape Town City Centre

The City Centre shows a decrease in the volume of sales from Q1 to Q3. However, there seems to be an uplift in average selling prices and average R/m2 values. It is worth noting that a number of transfers have been effected for the 16 on Bree development, which was sold off-plan several years ago and completed earlier this year. These have an impact on the average values overall, as noted in the chart below.  The average number of days on the market is shortening. The under R2m property segment still accounts for almost 60% of residential sales in the city centre market. At present, on Property24, there are close to 1000 apartments listed for sale in the city centre, of which nearly half are priced under R2m. So we are getting closer to a price match between property stock on the market and what buyers are looking for. Well priced one bedroom and studio apartments under R1,3m are desirable in the market place.

*16 on Bree Development Sales = 18 in Q1/1 in Q2/10 in Q3

The Foreshore

The Foreshore property node has dropped from quite low sales volumes reflecting in Q1 and Q2 to zero in Q3. So, no increase in the sales for the year to date. At present there are around 100 apartments on the market for sale in the Foreshore reflecting on Property24. Of these, 55 are priced under R3m.

De Waterkant        

De Waterkant remains a quiet market overall for the year to date, with relatively low volumes of sales compared to the number of sectional title properties on the market for sale (currently over 200). As with the City Centre and Foreshore nodes, the lions share of the sales that are taking place are under R3m, although there is wider gap between the property actually on the market, where around 45% of apartments are priced under R3m.

V&A Waterfront

The V&A Waterfront residential market remains a niche market. The average selling price and R/m2 both show an increase, alongside a decrease in time on the market prior to selling. 32 properties are currently advertised for sale in this residential precinct, with 12 of them priced in the under R10m range.

Please do not hesitate to contact me at anytime to discuss your property requirements, including a free, no-obligation valuation, or, if your property is already on the market, it's current pricing and advice on selling. I am available by appointment seven days a week between 8am and 8pm to assist with all your property requirements. I can be reached via Whatsapp on +27 (0) 81 063 1871, or email at: richard@kinesisproperty.co.za

Author: Richard Boxford