CT's Southern Suburbs & home prices

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08 Jul 2013

According to Seeff Properties Southern Suburbs, the suburbs of Rondebosch, Newlands and Plumstead are seeing huge demand and buyer activity thanks to good schools in these areas.

Seeff Properties Southern Suburbs sold this family home in Oakvale Road, Rondebosch for R5 million within five days of listing.

Agency managing director in the area Andy Todd reports that sales volumes are up by about 37 percent for the first few months of this year.

It’s mostly young family buyers with school going children buying these homes, as a result, these areas are experiencing stock shortage of family homes and homes that come onto the market and, if priced right, sell right away.

As an example, the agency recently sold a home for R5 million in Oakvale Road in Rondebosch within five days of listing.

In Newlands, homes sold were priced between R2 million and R6.2 million and the agency points out that family homes priced between R3 million and R5 million sell well currently.

Seeff says in Plumstead, buyer activity is seen in all price categories noting that compared to other suburbs, property is still reasonably priced and buyers get spacious homes while the suburb is close to Wynbery, Springfield, Plumstead, Westcott Primary and John Graham primary schools.

There are also stock shortages for freehold homes priced from R1 million to R2.5 million.

It could be that the sales are resulting from improved house growth in many areas around the country, as the FNB House Price Index report reveals that the average price growth grew to 6.6 percent year-on-year (y/y) from 6.2 percent y/y in May.

According to the report, the average value of homes transacted in the FNB House Price Index was R891 266.

However, the report further reveals that in real terms the index is -18.6 percent down on last decade’s real price peak reached in November 2007, while in nominal terms it is a mere 15.7 percent higher.

Compared to June 2003, 10 years ago, the index is up 44.8 percent in real terms and 148.8 percent in nominal terms, suggesting that the price effects of last decade’s residential demand boom have far from worn off despite a significant downward real correction since late-2007.

The bank expects house price growth to remain in single-digits due to potential pressure on demand in 2013. –Denise Mhlanga

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