Perhaps it’s no surprise, but 2015 has kicked off with significant demand from buyers further North. It would appear the attraction of life in the Western Cape, and specifically the Helderberg area, is stronger now than ever before.
At Harcourts Platinum approximately 1 in 4 buyers currently hail from up-country, and the demand has certainly strengthened in the past month. Increasing concern at the failing infrastructure in other provinces, and concerns about crime, continue to be the main driving forces behind the move to the Western Cape.
Most demand is in the price range between R 1.5 and R 3 million, and stock levels are low in these price ranges at the moment. A recent listing at R 1.795 million sold in 5 days with multiple offers submitted. Similar trends are experienced in the Southern Suburbs where listings are snapped up within days of coming on the market.
The strong demand in these price ranges means that property prices will continue to grow at a steady rate, and growth for 2015 is predicted at 8-10% in this price range. Slower growth is expected above R 4 million, somewhere in the region of 6 – 7%.
A sad reality is that crime has increased in the area as the newspapers report. Reports in the various Somerset West Facebook pages tell of numerous break-ins, muggings, and other crimes. It’s no surprise then that the demand for properties in gated estates is strong.
Whilst no guarantee that we are safe from crime, the fact is that criminals pick the soft targets and living in a gated estate serves is a deterrent. Sales in new developments that offer security, such as Sitari, Somerset Lakes, Kelderhof Country Village, and Hathersage Meadows, confirm that buyers want peace of mind.
That doesn’t mean that demand in the suburbs has dropped though. On the contrary, demand it strong – but especially in security estates.
We can expect these trends to continue in 2015, and beyond. Growth in property values between 6% and 10% is healthy, and sustainable. It’s unlikely we will see a “property boom” in the near future. Neither should be experience another crash, as markets have generally normalized. Steady growth is the order of the day and makes for a less volatile and more predictable future.
It’s the course of wisdom to factor in the possibility of a few small interest rate increases when you budget, despite the talk of interest rates remaining unchanged. It’s better to take a conservative approach and avoid financial pressure later.
Let’s hope 2015 continues as it has begun, with the exception of the crime. Hopefully common sense and a zero-tolerance to crime will return our neighborhoods to normalcy.
Principal of Harcourts Platinum, and Director of Harcourts South Africa
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