The number of units sold in Durban has certainly been slashed, but Durban's average selling prices, in spite of some depressing estate agency reports, have increased significantly.
Comparing the five month periods of January to May 2006, when the market was considered stable and before the start of the current cycle of rate increases and January to May of this year, which is the period being largely attributed to the softening in prices, Ross Sibbald, director at PropValues says, the average selling price for both conventional and sectional title units has increased significantly between the two periods across the Greater Durban Area.
Interestingly, Umhlanga is forcing the pace with a 35% increase in the average selling price for conventional homes and Durban North leading the charge with a 36% increase in the average selling price in sectional title dwellings.
The Upper Highway has recorded a 30% increase in the average selling price across all property types sold between the period under review followed by a 27% increase in the Berea, a 25% increase in Westville, 14% increases in both the Bluff and Pinetown and a 12% increase in the Queensburgh residential markets.
Mike Bennett, managing director of Proprop franchise chain, and Berea-based Malcolm Plint of Malcolm Plint Estate Agents both confirmed that prices have held up in their areas in spite of the slowdown in sales volumes.
Plint classifies the current market as "refinding its feet after a wonderful couple of years of exponential price rises". Unlike earlier market downturns, he believes the effects of the current decline are being psychologically overemphasised because of its unexpectedness.
Bennett says the half percentage point interest rate increase announced last week was positive for a market in trepidation of an increase that many speculated could hit a full two percentage points. The Bluff's Craig Bell of Acutts local franchise agrees to its calming effect, but says further stability of rates is needed to fully restore market confidence.
Like elsewhere, the trend of growing preparedness to negotiate by sellers has also stepped up on the Bluff, especially if presented with good cash and bond offers. The emerging good value has also created some market response.
Berea-based Chris Pearson of RE/MAX Address says the current market activity on the popular Berea remains below the R1,5m price with little moving above the R4m mark. "Most would-be sellers are holding back from selling because they can afford to and also because its not the best time to sell." However, he does note that enquiries remain generally firm.
For more information contact Ross Sibbald on 031 266 0035.
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