AA - 2020

Author: Samuel Seeff
Chairman of the Seeff Property Group
8 August 2020

South Africa’s property sales highest in six years – where people are buying

While the market has picked up significantly and Seeff ended July with the highest sales in six years, buyers putting in low offers are left disappointed, says Samuel Seeff, chairman of the Seeff Property Group.

Seeff said that sellers in many areas are achieving close to and often full asking price in the lower price bands, provided that the asking price is set realistically.

This is especially true below R1 million where buyers are benefiting from an exemption of transfer duty, the low-interest rate and a favourable bank lending climate, but ranging to about R4 million, depending on the area, he said.

“When there are discounts, it is only about 5% to 10% and it is only really above the R4 million price band where there is some room for negotiation, but this is highly area-dependent.”

Seeff said that luxury areas such as the Atlantic Seaboard, Southern Suburbs, Sandton, Pretoria East, Zimbali/North Coast, and coastal areas such as Plettenberg Bay are all reporting an uptick in activity.

The group noted that the latest interest rate drop has taken the mortgage loan rate to a new historic low of 7%, while Ooba reports that the average bank deposit requirement is down y/y to 8.1% (from 13.2%) as at June.

“That said, while it is generally a buyer’s market, there are very few desperate sellers.

“Most sellers are prepared to wait for the right price. Buyers will need to be realistic with their offers or they risk losing out, especially in the low to mid-price ranges, but across the board really,” Seeff said.

Western Cape demand

Cape Town has seen a renewed interest from foreign buyers with about R175 million in sales recorded over the last month with over R100 million of that on the Atlantic Seaboard, predominantly in Camps Bay and Sea Point, said Ross Levin, managing director for Seeff Atlantic Seaboard and City Bowl.

Sales have been across the price bands from around R1.5 million to R18 million for a beach bungalow recently sold by Seeff agents to a Russian buyer, he said.

Levin said that buyers are predominantly from the UK, Germany, the Netherlands, and other Northern-European countries such as France and Belgium, but also from Russia and there has been quite a few Zimbabwean buyers this year.

In Plettenberg Bay, Kevin Engelsman, licensee for Seeff said the market is robust following an influx of buyers looking to escape to the coast during the Covid-19 pandemic.

Engelsman said that there have been two sales above R40 million, both at full asking price.

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