Optimal time to sell as average house price growth starts to slow down
Category Property news
“Research shows that the Western Cape outstrips other South African provinces when it comes to growth in the average selling prices of property,” says Mike Greeff, CEO of Greeff Properties,an exclusive Affiliate of Christie’s International Real Estate. According to FNB Western Cape House Price Index, house prices in the Western Cape grew 7.7% year-on-year compared to the national average of 5.2%.
Record prices in the Western Cape
“There has been phenomenal growth over the past twelve months in particular, with record prices being fetched in several areas of the peninsula, with Constantiaberg, Southern Suburbs and False Bay having performed particularly strongly,” says Greeff. He says that average selling prices recorded by Propstats in the Constantiaberg region, across the board for all property types over the twelve months spanning June 2013 to June 2014, increased by 7% when compared to the preceding twelve months, but in the most recent twelve months (being June 2014 to June 2015), the average selling price grew by 19%. “A similar trend is reflected in the Propstats Southern Suburbs figures, which show a growth of 13% when comparing the June 2013 to June 2014 period to the June 2012 to June 2013, but a significantly higher growth in the average selling price by 24% over the most recent twelve months,” says Greeff.
On the brink of a new phase
He adds that the average selling price growth in False Bay has also been “stellar”, in spite of the recorded drop by Propstats to a 23% increase in the average selling price over the past 12 months compared to a 30% increase in the average year-on-year selling price recorded for the June 2013 to 2014 period.
“These figures are indicative of trends and the predominant indicator is one of strong consumer confidence in province,” says Greeff. “While average house-price growth has been exciting and significant, economists such as John Loos are predicting that we are poised on the brink of a new phase which is the start of an inevitable long-term super cycle correction,” says Greeff. “This is not something to be feared, but rather information to be utilised to assist in the making of significant economic decisions or choices,” adds Greeff. “We are likely to see average selling price growth levelling out somewhat, so those waiting for prices to rise even further before they sell might factor this information into their strategy and look to sell within the next six months, particularly since demand for property in the Western Cape remains high,” says Greeff, adding that fewer people emigrate from the Western Cape than from any other province.
Greeff says he is not convinced that selling prices across all property types will level off: “Security estates continue to attract buyers in their droves, as demand for this type of property continues to grow, but stock is limited. Over the past decade, those who have purchased property in gated estates have enjoyed significant growth, and this is likely to continue, making investment in these units a wise choice.”
Author: Greeff
