DURBAN - Over the last three months, sellers in Cape Town’s swanky Atlantic Seaboard and Constantia Upper areas have reduced their asking prices by up to R10 million to conclude a sale according to the latest sales data.
Ross Levin, managing director for Seeff Atlantic Seaboard and City Bowl said that as a result of the continued weak demand at the upper price levels, sellers are now offering steep discounts to attract buyers. Some recent sales have been concluded at anything between 20 percent - 50 percent below the asking prices.
The market is already down by 40 percent since 2016/17, and despite the expected uptick following the election, the reality has been a further decline of 15 percent in value generated during the first half of this year. High-end sales remain especially slow. Consequently, he says, there’s plenty of good stock and prices are falling!
After some reluctance, sellers are negotiating, creating opportunities for buyers to find more affordability in a market that has not been the case for many years. Lance Cohen, luxury market specialist says he has several high-end listings where the prices have been reduced by millions of Rands and wealthy buyers have a real opportunity to find excellent investment value right now.
Propstats sales data shows that it now takes around 126 days to sell, twice as long as last year’s 75-odd days, and Atlantic Seaboard sales are now coming in at an average price differential between asking and selling prices of 16.9 percent with some deals concluded at as much as 20 percent - 50 percent below the asking prices.
In Bantry Bay, a R45m asking price was dropped by 4 percent to R27 million. In Fresnaye, a vacant plot price dropped from R35m by 27.2 percent to R25.5m and the average price differential in the suburb is now 23.4 percent. In Clifton, an apartment sold at 40.4 percent below the asking price and here too, the price differential is now at 20.3 percent.
Even under the R5m “magic mark” where we still see good activity, Levin said that the average price differential sits at around 9.7 percent with apartments in Sea Point having sold for up to 21.3 percent below the asking price.
The median sales price for apartments at the V&A Waterfront Marina has declined by 47 percent since 2017 and by 24 percent since last year.
As a result of an overstocked rental market and economic pressure, you can now rent a swanky Atlantic Seaboard property at a fraction of the price of buying, says Natalie Muller, Seeff’s rentals manager for the area.
Naturally, the slow market conditions have resulted in properties taking about 60 days longer to sell with the time on the market now at around 25 weeks (or 5,5 months) compared to 16 weeks (or 3,5 months) in 2018, says Mr Cross. Where sellers only had to cut their asking prices by around 7 percent on average, this has increased notably to around 11 percent this year.
Samuel Seeff, chairman of the Seeff Property Group reckons that we are in one of the best buyer’s markets in decades, especially at the upper price levels. The favourable buyer’s conditions are supported by the low interest rate and keen competition among the banks to grant mortgage loans and buyers should start taking advantage of the opportunities.
Seeff said that some factors that have contributed to the slowing down of the property market include aweak economy, poor policy decisions and too much noise around negative matters continue to dampen confidence in the economy and property market as well as sovereign credit downgrade risks.
He added, "we need confidence and an indication of turnaround and growth for people to again start putting more money into the property market, especially wealthy buyers".
Six exclusive Cape Town addresses where you can now save millions of Rands:
1. Fresnaye, R75m (reduced from R79m)
2. Fresnaye, R57m (reduced from R65m)
3. Constantia, R35m (reduced from R37m)
4. Hout Bay, R29m (reduced from R39m)
5. Camps Bay, R24.9m (greatly reduced considering a Balie Bay penthouse was sold by Seeff for R39m plus VAT just over a year ago)