Cape Town’s Atlantic Seaboard now a property buyer's market - Market News, News
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12 Apr 2018

Cape Town’s Atlantic Seaboard now a property buyer's market

Cape Town’s Atlantic Seaboard is now in a "buyer's market phase", say local Seeff agents, with properties selling below the asking price and sellers having to moderate their expectations. 

In Fresnaye, this apartment offers two bedrooms, two-and-a-half bathrooms, an open-plan living area, integrated kitchen, 24-hour security and access to a communal pool. It is currently on the market for R7.995 million – click here to view.

The latest Propstats data show that the sectional title sector of the market is down year-on-year by about 34% in value and 41% in volume terms for the first few months to early April. 

The latest FNB Property Barometer also points to a weak Cape market, and this is reflected in the Propstats figures. Ian Slot, MD for Seeff Atlantic Seaboard & City Bowl, says where the market generated almost R1 billion in sectional title sales by early April last year, it has only managed just over R600 million this year. The price gap has almost doubled from 5.4% to 10.2%, with recent sales concluded at anything between 10.7% and 28.6% below the asking price. 

It now takes almost twice as long to sell a property, with the time on the market stretching from six weeks last year to over 11 weeks. Adrian Mauerberger and Cecily Sher, luxury sectional title specialists, say stock has increased notably, but sellers are still not motivated enough to drop their prices sufficiently to encourage buyers to put pen to paper. 

This apartment in Sea Point, Cape Town, has three bedrooms, two-and-a-half bathrooms, open-plan living areas, built-in kitchen, private deck with pool and 24-hour security. It is selling for R7.1 million – click here to view.

According to Mauerberger and Sher, the demand in the luxury sector is mostly in the R5 million to R10 million range and it is primarily 'own-use' buyers who are looking to scale down. While this market has never really attracted foreign and investment buyers, semigration demand has dropped significantly. 

They say, right now, only sellers who are motivated enough to drop their price and ensure that their property offers more than what's currently available at a lower price, will sell. 

Bryan Ginsburg and Hilary Biccari, who specialise in sales below R4.5 millin, say this portion of the market comprises about half of all activity, but it is also seeing a drastic slow-down and a notable increase in stock levels giving buyers much more choice. They say although there are still plenty of keen buyers including investment and foreign buyers, they are looking for negotiability from sellers. 

This Bantry Bay apartment offers two bedrooms, two bathrooms, open-plan living areas, secure parking and 24-hour security. It is on the market for R6.35 million – click here to view.

A drawback for the area, is that many inexperienced agents are still listing properties at inflated prices. Sellers should note that although there are still plenty of buyers, recent sales concluded in the area show price cuts of 12.8% to as much as 20.4%. 

According to Mauerberger and Sher, the flipside to the market right now, is that buyers who are pushing too hard for a bargain buy, may miss the boat and will end up having to buy as the market starts its upswing. Sectional title property on the Atlantic Seaboard is seen as an excellent investment and has achieved some of the best capital appreciation rates during boom times. If you are serious about buying in the area, you would not want to miss out on a great opportunity, they say. 

The agents say sectional title property offers low-maintenance upkeep, a major drawcard in light of the water crisis. The lock-up-and-go lifestyle enables buyers to travel more freely. This property class is also popular for rentals, thus adding to investment proposition. 

Ginsburg and Biccari say motivated sellers are doing business right now and there is a shift with more sellers open to negotiation on their prices, making it an excellent time to buy on the Atlantic Seaboard.

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