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“AVERAGE” HOUSE PRICE DIFFERENCES ON HOUSE SALES CAN BE MISLEADING – BUT UPPER CLAREMONT IS PERFORMING VERY WELL
In recent years, says Anton du Plessis, CEO of the Cape Peninsula estate agency, Vineyard Estates, the average difference between the achieved price and the asking price of homes in the southern suburbs has been ± 13 to 15%.
“This fact,” he said, “is often discussed. The danger is that it can lead to all potential buyers automatically offering 15% less on every offer they make – which could be a big mistake.”
The fact that the 15% is an average figure should, said du Plessis, make people realise that some homes have sold at or close to their asking price while others (usually hugely overpriced) have sold at 30% or more below the asking price.
“All sorts of intangible subtle factors can influence the bids on a home,” said du Plessis, “and statistics are by no means hard and fast reliable guidelines: for example, in the last six months, the “average” price in Bishopscourt was R20 million – but on investigation it transpired that only one house sale was put through the Deeds Office in that period – in fact, in that suburb, it is commonplace for properties to come on the market in the R30 millions and to sell in the early R20 millions.”
Then, too, said du Plessis, certain areas cover a wide range of housing: in Claremont, for example, it is, he said, still possible to find apartments priced under R500 000 but the precinct also has homes selling around the R 20 million mark. Averages here can, therefore, be misleading.
“The difference between asking and achieved prices in Claremont in the last six months is only 7% – this probably reflects the fact that sellers have become more realistic with their asking prices – it does not yet indicate a strengthening in the market.”
What will surprise many Cape Town southern suburbs property pundits analysing the sales in Claremont, said du Plessis, is that in the segment over R6 million the asking/achieved price difference recently has been only 5% while in the under R3 million bracket it is again at 7%.
“The 5% figure,” said du Plessis, “possibly reflects the fact that many upper bracket buyers can get bonds easier (as some are asking for only 50 to 70% of the purchase price). Others are straight cash buyers who do not need bonds. In the under R3 million market, many buyers are looking for 90% bonds, and are pushing the boundaries where it comes to qualifying for a bond.
Most of Cape Town’s southern suburbs, said du Plessis, have always been prime property and have traditionally resisted price falls strongly. While he does not expect prices here to rise by more than 5 to 6% in 2011, he remains adamant that in the long term the prime southern suburbs served by Vineyard Estates – Upper Claremont, Upper Kenilworth, Rondebosch, Bishopscourt and Constantia still rank among the top 10% best property buys in SA today.