Massive Surge in Development Sales

Buyer interest in the Helderberg area continues to be strong, as it has been over the past few years. The stream of buyers from more northern areas of the country has intensified.

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As many estate agents may have noted, there has been a reduction in the number of resale properties available for purchase.  That means that fewer property owners are making the decision to sell, for a host of reasons.

This reduction in the levels of available stock – properties for sale – is continuing to put upwards pressure on pricing, particularly in the price range below R 3 million.

All markets are impacted by supply and demand.  When demand increases and supply decreases, then prices increase.

The reduction in the amount of resale properties available for sale has had a very positive impact on the development space.  For a number of years now development property sales have been strong, especially as developers listen to the market and have produced an affordable product that meets buyer demands.

But the low availability of resale properties has driven even more purchasers to buy in developments as opposed to the general suburbs, simply because there is very little else to choose from.

We’ve seen a significant increase in sales in Kelderhof Country Village, Sea View SS343_PT00005039_01Lakes Estate, and Hathersage Country Meadows, which is now almost sold out.  As stock levels in developments also drop, so the pricing there also increases.

This is good news for buyers who are investing in property, but especially in developments.  We are typically seeing that property values in the developments   we market are escalating at 10 – 14% per annum.  In today’s economic times,        a growth of such a nature is handsome, and reinforces the importance of investing in property.

Some may argue that other forms 1.6_Glassglobeof investment, such as stocks and shares, are growing at an even faster rate.  Whilst that may be true in some instances, stocks and shares are extremely volatile, as we’ve seen in China over the past month where they lost over 30% of their value.

Property continues to be an attractive investment option with much lower risk.  The added benefit of investing in property is the use you derive from it – either to live in the property for yourself, or to rent it out for investment income.

In addition to this, you are able to borrow from the banks to finance the purchase, which is impossible to do when purchasing shares.

So the general outlook for property is good, despite the concerning issues in Europe and China.  As long as you budget wisely to allow for interest rate increases, there is good reason to continue to invest in real estate, especially in developments, which offer exceptional value and security.

Steve Caradoc-Davies

Principal, Harcourts Platinum

Director, Harcourts South Africa

steve.cd@harcourts.co.za

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