A Tale of Two Markets a Property Glimpse Into 2020
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A TALE OF TWO MARKETS A PROPERTY GLIMPSE INTO 2020 he year 2020 will start off with a Market that remains • The time on the market has lengthened from 12 weeks to oversupplied in most price segments – we are in a 16 weeks and most real Sellers have to offer a discount on TBuyers Market Phase. their asking price to remain competitive in a period of “Price Adjustment” due to an overstocked market. • The “tale of two markets” in the Upper Highway area has 2 distinct parts to it. The first part is that there is a brand new • The upside to the market is that it is “one of the best times to market called Apartment Living which is aimed at first time buy” in 2020 and this area appears great value opportunities Buyers; is lifestyle rich, modern and mainly below R1,000,000. compared to rival areas such as Durban North and Umhlanga. The second is the Traditional Second Hand Market which itself • The broader Durban band is brighter than 3 years ago with is split into 2 distinct markets, that which is selling that which John Loos raising the question – Is Durban due for a period of is not selling. economic and property “outperformance”? As the perceived • Overall sales in the area are up 20% but 38% of this figure Durban and surrounds “lifestyle” and early signs of superior is Apartment Sales with the Traditional Market Sales in fact Durban Economic performance. Is it time for the highly skilled slowing by 26% in the Election year. “semi-grant” population to increasingly look at our coastal and other regions for improved property affordability and a less • In the Traditional Market, the sub R3m market is selling and congested environment. makes up 84% of all sales where the over R4m sales is not selling well at all. • The downsizing trend as a reason for selling is strong and the availability of stock, great values, excellent schooling and • In our areas the sub R3m market has Buyers who are generally a more relaxed outdoor lifestyle makes the Outer West a committed to staying and happy to buy. Samuel Seeff says targeted area for Buyers. with no discretionary money, this market has been boosted by favourable mortgage lending and unprecedented bank • The Industrial growth of Hammarsdale and Cato Ridge due approval rates. to the inland container terminal will positively impact on the residential market. • Price increases in those Market segments that are selling will remain flat around3.6% due to overall macro economic segregation. MARKET TRENDS www.seeff.com MARKET TRENDS 2019 - 2020 RESIDENTIAL AREA SPECIALISTS n their quest to empower people to prosper through property, what we are calling the “Apartment market” which is a brand-new the Seeff brand focuses on the business of real estate. They do segment and the traditional market which is all current second-hand Ithis by compiling up to date local market information to enable stock. The traditional market sales make up 813 of the total of 1313 Sellers to work with us. sales per annum with the balance of 500 being apartment sales. Therefore, the traditional market which normally operates at 1100 It is important to state right upfront that there is not one residential sales per annum has in fact slowed to 713 sales per annum which market. This market must be broken down into property types and is a slowdown of 26%. In short, despite consistent demand, the price segments for wise decisions to be made. This area is fortunate increased stock levels have moved the market to favour buyers. that as a result of on-going multi-faceted development, the sales tempo of number of sales made has increased by 20%. This has Buyers have more choice and this creates an opportunity for some been primarily as a result of large apartment type developments aggressive purchasing to take place, on the other hand, Sellers which now accounts for 38% of all sales made in the area. need to take care in pricing their property correctly in a market which is over-stocked in some categories. It is in fact become a This is targeted at a for the Upper Highway area. This new market reality that in the traditional market, we are in a period that we call market is younger and often a and focuses mainly first-time buyer “PRICE ADJUSTMENT” where many properties coming onto the on the sub million rand market. This is seen as a positive trend for market now are coming on at 2015/2016 prices if they are to be the area as people who have grown up here, can also buy here. competitive due to high stock holding. However, if one looks at the mechanism of supply and demand the norms in the area are that with a stock holding of 600 properties for A strong observation in the market is that downsizing has become sale at any one time, the area has sold on average 1100 properties our primary reason for selling; and this includes not only those who per annum. want something smaller in size; but those who wish to downscale economically. It is also true that immigration has played a strong These norms have shifted with the last 12 months seeing stock hand in stock availability. In the past 6 months, the high stock holding at 2227 properties on the market. And a sales level of holding of over 2000 properties has in fact increased by 10% from per annum which means that sales tempo in the area has in 1313 2007 items per sale to 2227 items available. fact increased by 20%. We must now draw a distinction between THE SEEFF POSITION IN THE MARKET COLLABORATING WITH SELLERS Seeff is a successful and growing brand in KZN, this brand has grown 10% per annum ellers can collaborate with Seeff to design a selling over the last 2 years. process which will result in less hassle and achieve the Sbest price in the given market conditions. This growth is against the norm within the context of the Upper Highway area, if one excludes It is important to note that within our area there is not one development sales because we don’t have access market. Sellers are encouraged to identify which price range to them, the Seeff performance is a market share their property sits in and to become familiar with market conditions in that price range and property type. of 17%. If one bares in mind that there are 32 agencies in It is no longer enough to have accurate market information. the Upper Highway area, this makes Seeff Hillcrest, The agency that represents you also needs to have Kloof, Waterfall and Surrounding areas a Market superior marketing capacity because although professional Leader in your area. photography is a key element for online marketing, it is also the correct “marketing pitch” for a home that attracts the right buyers. TO EMPOWER PEOPLE TO PROSPER THROUGH PROPERTY. Gregg Wilson & Michele Wilson Seeff Hillcrest Directors MARKET TRENDS www.seeff.com THE KZN BIG PICTURE SHOWS SIGNS OF CONFIDENCE, RESILIENCE AND ONGOING DEVELOPMENT e end 2019 with clear signs of strong has also seen another pillar of investment in has recently bought R1,1 billion rands worth pillars of confidence that the market the retirement market with the Howick area of property in the CBD and Florida Road isW in fact moving despite sluggish economic leading the way and these sales have driven for revamping. The point is, with all the conditions. improvements in facilities such as shopping movement above, it indicates that people are centres and private hospitals. buying and selling and transforming KZN. Some of these indications are record sales in various developments such as Zululami near THE RETIREMENT MARKET HIGH RENTAL DEMANDS Salt Rock in the North Coast where just over The is also strong in At the lower end of the market, buy to 500 sites of a 750 site development were Retirement market the Umhlanga area where the rent investors are back because of high sold in just over 30 days of launching. Close Kindlewood development enters a new phase. Hillcrest rental demands. This is despite an overall to 300 of these sites were sold to developers. has been another stronghold for retirees negative national sentiment… the KZN area EMBERTON ESTATE and the Polo Pony Retirement centre is yet has a number of encouraging developments another new development. This office has as mentioned above. The Upper Highway Developers are also busy in the Hillcrest experienced strong enquiry levels from other area continues to sell a consistent amount area where the 500 unit Emberton Estate retirement home groups who are targeting of residential properties between 1100 and moves into phase 2 with the launch of further the area. It can be expected that a new life 1300 properties per annum. The previous apartments below R1,500,000. right retirement village will emerge early in years projected sales pattern of 1313 This is off the back of over 180 sales of 2020; offering approximately 70 units. properties is a remarkable achievement apartments with an average price of around of consistency and a shift towards a SIBAYA PRECINCT below R1,500,000. The current new phase younger market. at Emberton has seen products in the sub We have also seen major developments in UMDLOTI PRIVATE UNIVERSITY million rand bracket being snapped up and the Umhlanga area in the Sibaya precinct the future planning at Emberton also includes and the recent launch of the 5-Star Oceans A new school is set to open its doors in a proposed three blocks of flats which will Hotel by the Radisson Group sees a new 2020 at Umdloti – the first new school further cater to the sub million rand bracket.