After two and a half years of reality checks and changes, it’s no surprise that South Africans are a little wary of making large, or long-term decisions right now, notes Rawson Properties. The uncertain economy, skyrocketing inflation, and escalating interest rates certainly don’t make property purchases an intuitive choice.
According to local property expert and franchisee for Rawson Properties Helderberg, Roger Lotz, however, there are some areas that continue to shirk the trends and thrive, despite the challenges. A perfect example is Somerset West.
“If we look at recent data for Somerset West property, it’s very clear that neither price growth nor unit sales have suffered significantly over the course of the pandemic,” he said. “Growth has actually followed a fairly steady incline from as far back as 2012. The average selling price of a freehold home is now R3.15 million – up a massive R600,000 from 2020.”
Sales activity has also shown significant growth in the last year, with almost 50% more sales taking place in 2021 than in 2020. Expectations for this year are slightly more modest, with around 1320 transactions predicted, signalling a minor contraction from 2021’s 1556.
“In general, trends over the last six months paint a very positive picture for Somerset West’s future, despite factors like interest rate increases which could impact buyer activity,” said Lotz. “We are privileged to live in an extremely sought-after part of the Western Cape, which has contributed to our exceptionally resilient local property market. Those looking to buy or sell in 2022 will still find excellent opportunities out there.”
As for what the market currently holds, freehold properties make up 42.81% of stock, with freehold homes in estates in second place at 29.28%. The sectional title market has taken a backseat in terms of popularity since the onset of Covid, contributing only 21.88% of properties on the market, despite a median price of less than half that of freehold homes.
“We have seen a shift towards freehold properties over sectional title as people spend more time at home – work from home is still a big factor,” he said. “Homes inside security estates are still very popular, but often come at a premium price point. As result, we’re seeing more buyers looking outside of gated communities in search of value for money. Demand in this segment – in our experience – is growing month by month.”
“We’re a small town of only around 20,000 properties, but we have a lot of variation from street to street and area to area,” said Lotz. “Understanding what your typical buyer is looking for, where they’re looking, and what price points they can realistically consider, is essential to get your listing in front of the right eyes.
“Get it wrong, and you could be on the market a long time right now,” he cautioned. “Get it right, and we’re seeing favourable sales happen in a matter of days.”