Property Talk

Residential property market in South Africa

The analysis of property sales data can provide exceptional insight into the property market and the emerging trends. Following on the analysis of the 2017 vs 2018 year-on-year comparison for Zimbali,

Simbithi and Seaward Estates, where it was demonstrated that the higher end of the market was affected worse with Zimbali Sales value down by -45,49%, Simbithi by -30,62 and Seaward Estates, representing the lower end of the price spectrum, by a more palatable -7,98%, it is fascinating to extend this analysis a little further within KZN and then to the Atlantic Seaboard in Cape Town, which represents the pinnacle of the residential property market in South Africa.

The average price of transacted properties in Seaward Estates for 2018 was R2,606,625. Over the same period the average price across sold properties in Palm Lakes was R1,944,435. This makes Palm Lakes an interesting proxy and case study for demand across the lower price range. Interestingly the value of Palm Lakes sales was down by -36,50% on a year-on-year comparison from R238,853,094 across 150 sales in 2017 to R151,665,900 from 78 sales in 2018. The 72 fewer sales recorded in 2018 therefore had a significant impact. These figures also tend to indicate that even the low end of the property market spectrum eventually came under pressure last year.

Venturing a little further south Mount Edgecombe Country Club and Estate (MECCE) is an excellent proxy for the Umhlanga Rocks market and has historically traded very well. The value of 2017 sales were R339,541,755 from 61 transactions.

A decline of -18,31% was reflected year-on-year with the 2018 sales value being R277,382,500 from 43 transactions. The average price in Mount Edgecombe of traded properties in 2018 was R6,450,756. I picked up on two larger transactions in 2018 within MECCE - 56 Montgomery drive traded at R24,315,000 and 26 The Lakes Rd traded at R17,300,000.

Moving to Cape Town and considering two of the premier suburbs - the V&A Waterfront and Clifton, we start to get a fuller picture of how the very high end of the residential property market has been affected in South Africa.

The V&A Waterfront delivered R500,280,000 from 27 sales in 2017 and then only R151,028,759 from 13 sales in 2018. This -69,81% decline in sales value on a year-on-year basis is a little alarming.

The average sales price in 2017 was R18,528,889 in the V&A Waterfront and R11,617,597 in 2018. Clifton delivered a whopping R1,094,450,000 in sales value from 31 transactions in 2017.

Amongst these were two noteworthy sales - a sectional title unit of 558 sqm at a scheme called The Beaches in Victoria Road traded at R130,000,000 - Yes that is R232,975/sqm! Then there was a sale at R120,000,000 for a freehold home at 3 Nettleton Road (arguably SA most exclusive street address).

The 2018 Clifton sales value was down -68,69% to R342,685,000 from 21 transactions. The average price traded decreased from R35,3m in 2017 to R16,3m in 2018. These figures indicate tough times for the very high end of the market.