The recent sale of a home in Nettleton Road in Clifton for R111-million and a Camps Bay property for R450-million has sent local sellers into a frenzy, retracting their original pricing and upping it in the hopes of nabbing a higher bidder. One property owner turned down a full price offer of R65 000/m² on his Clifton apartment, hiking it up to R75 000/m².
There are only a handful of units on the market in Clifton for less than R10-million and the thinking is that this summer will bring in many consumers who are willing to pay. As there are only 269 sectional titles in Clifton, the market is small.
And this is not only subjected to Camps Bay and Clifton: even Green Point and Sea Point have felt the market’s effects. A redevelopment plot in Green Point which was originally listed at R10.5-million was sold for R14.5-million and one-bedroomed apartments for sale in the two suburbs frequently go for over R2m, equating to R30 000/m².
In other parts of Cape Town the same money can buy a substantial property, so clearly, buyers on the Atlantic Seaboard are also willing to sacrifice size for location and lifestyle, and that is another factor that continues to put upward pressure on prices here.
Prices here are being driven by the extremely limited supply of land between mountain and sea – and the construction of showpiece homes to rival those of other famous coastlines.
Developers are keen to acquire those that do become available for redevelopment into upmarket sectional title complexes with two to four units.
Although this might seem an abnormal, greedy occurrence, real estate managers have commented that the seller’s increase of prices for their property are a natural way of responding to consumer demands and establishing market values.
What buyers are prepared to pay for a property establishes the market value, not the agents or the sellers at that time. Then savvy sellers will take note and base their expectations on recent sales in the area.
In a rising market, where demand exceeds supply and offers tend to come in quickly, sellers may reject an offer in their quest to obtain the greatest value possible and this does happen from time to time even though a negotiating margin has been allowed for.
[source: fin24]
