It costs 30% more to build a house than to buy one, yet it is still a buyer’s market.
Rencon Real Estate’s joint-principal Renny Schwedhelm says that simple economics meant that sellers would soon regain the high ground.
“Buyers have been in control, with offers ruling rather than asking prices. A correction is overdue.”
Building costs are soaring, contractors are struggling, and that will mean a shortage of stock, perhaps not in 2019, but not long after. Had it not been for a strong rental market, he said, 2018 would have been a tough year financially.
Fresh Lifestyle Properties had a good sales year, said owner Brian Kinnear, although business slowed late in November and December.
“As the year progressed, we found that the sweet spot in East London, in terms of affordability, was between R1.2m and R1.8m. And banks were accommodating as long as people met their requirements.
“Definitely a year that still had the buyers on top, and demanding value for money, which they can easily establish with a quick internet search.”
Value was not directly measured against price, he said.
“We had a house in the Quarry, probably East London’s most prestigious address, on the market for R5.5m, and it was exceptionally good value for what it offered. We are launching Phezula Heights, in Dorchester Heights, early next year, starting at R1.2m to R1.6m. Very different from the Quarry, but still excellent value.”
The uncertain political situation, with the elections in 2019, has created a “wait and see” attitude, said Leza Kruger, principal of Jikaleza Properties, situated at Crossways, on East London’s east coast.
“Money is tight, and buyers are holding back on decisions, except for the high net worth individuals who are sniffing at great bargains.”
Colin Kemp of Kemp Estates said it had been an exceptionally tough year, but not only because of a paucity of qualified buyers, who can get bonds.
“My biggest gripe is with the Estate Agents Affairs Board, which seeks to control the industry, and is hell bent on milking it with massively expensive fees, both for membership and never ending courses. It is trying to turn salespeople, whose primary task is matching a buyer with a seller, into quasi- professionals, which is not the case with other selling occupations.
“We are not lawyers, and don’t wish to be. We sell property.”
Jill Fish, of Jill Fish Properties shared some of Kemp’s ire with EAAB.
“Having been in the business for 21 years I think, with respect, that I have a good grasp of the business and having to complete the endless routine upgrades is time-consuming, and expensive, and does not add value.”..