Despite challenging market conditions, property sales activity in Johannesburg has continued to rise over the past six months, with the Chas Everitt International property group experiencing exceptional results – including the recent sale of a R71m mansion in Sandhurst.
So says Rory O’Hagan, principal of the group’s Sandton & Hyde Park office serving the northern suburbs of the city, who notes that even the “perfect storm” combination of increased load-shedding and other service delivery problems, rising inflation, and higher interest rates has done little to scare off potential buyers.
“Johannesburg is clearly still the engine room of the SA economy, and home to most of the country’s top business leaders, industrialists, and entrepreneurs as well as an increasing number of affluent foreign investors. Ambitious young people from smaller towns and less developed regions also continue to move here in search of employment and a better lifestyle.
“And as a result, our office has been achieving more than R100m worth of registered sales per month in the northern suburbs since January. It is also significant that only a handful of those sales fell into the luxury and super-luxury categories, and that by far the majority took place in the R2m to R5m price bracket, as this indicates broad spectrum demand. The recently-concluded R71m sale is not included in these figures either.”
He says there is still strong interest among buyers who are returning to Johannesburg after moving to the less-populated country and coastal areas during the pandemic, but that the most significant sales driver in recent months has been a desire among many existing homeowners to sell their larger properties and “right size” to smaller homes in response to rising municipal property rates and the increasing costs of utilities, security and maintenance.
“This is most evident in the rapid uptake of the apartments at The Emerald development in Hyde Park, which offers many on-site lifestyle and sports facilities as well as convenient proximity to the exclusive shops and restaurants of Hyde Park Corner, Melrose Arch and Sandton City, and to many sought-after schools. The fourth phase of this development is now almost sold out.”
On the other hand, says O’Hagan, the market is creating exceptional purchase opportunities for individual and corporate buyers who have the means and the desire to acquire larger homes in the most desirable suburbs in order to accommodate growing families, home businesses and foreign executives working in SA on three- and five-year contracts.
“Sellers in these areas are now pricing much more realistically and are much more willing to negotiate, which creates room for excellent capital growth once interest rates drop. The banks are also still keen to approve new home loans, although many buyers in this sector are purchasing with cash.
“Meanwhile, increased personal safety and security remains a priority for many buyers, and this is driving sales in well-known lifestyle estates such as Dainfern, Blair Athol and Waterfall, as well as new cluster home developments such as Melrose Walk, which is also almost sold out.”
Turning to the rental market, he says this is also thriving as many current tenants decide to delay purchasing until interest rates stabilize and hopefully even start to drop, and that this is creating renewed interest among buy-to-let investors that is expected to translate into additional sales in the second half of the year.