Shortage of properties on sale

Gerhard Kotzé looks at how you can take advantage of the shortage of houses on the market. Property buyers, buyed by the more positive mood in the market, are finding that there is something of a stock shortage in some respects, even at this early stage of the recovery cycle.

This is due to large numbers of sellers now withdrawing their properties from the market in anticipation of receiving a higher price “down the road”.

Buyers can find ample stock, wide choice and value in recently completed sectional title and cluster developments.

While we have what amounts to something of a shortage of pre-owned freehold properties we have precisely the opposite in the case of cluster and sectional title projects where developers with long lead times were hard hit by the recent property market recession.
Whereas property supply and demand usually works in tandem across all categories, there is now a divergence which works to the advantage of buyers.

Nor is the situation likely to change in the short term, he believes in that the supply of cluster and sectional title units is likely to remain in surplus for the immediate future, despite a lack of plans passed and new building activity.
There is therefore a brief window of opportunity for buyers to acquire such properties, probably at good prices, before supply moves into general equilibrium across the board once more.

On the other hand as far as freehold properties are concerned, sellers may be over-optimistic about the likelihood of obtaining higher prices later, particularly if they make the mistake of returning to the market in say, six to nine months time, expecting to see a significant increase in the general level of prices.

The joker in the pack on this scenario is what is likely to happen to the market post-World Cup when the euphoria dies down and the country’s economy has to re-invent itself.

Then of course there is the ever-present possibility that interest rates may increase again. There are already hints in the media that the current low levels of interest rates may not last much longer as the economy recovers.

Finally of course there is the old property adage that if you sell at a particular stage of the market cycle, you will also be buying into prevailing market levels and that, all things being equal, there is no particular advantage to be had from delay.
 

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If you whizz up Jan Smuts Avenue in Johannesburg too fast – that’s past Sandton and towards Rosebank – you’re bound to bag a whopping speeding fine (just after Dunkeld) and possibly miss the glorious suburb of Hyde Park altogether. So slow down, wind down the windows and take a moment to stop and smell the roses, darling. Ranked as one of top suburbs in the country, Hyde Park borders Craighall Park, Sandhurst and Illovo. These are exclusives addresses – Jozi’s very own version of Beverly Hills.

Wander around the area (if you have the patience for countless security booms) and you’re guaranteed to find yourself gawking at the places that some people call home. Sure there are flats on the outskirts of Hyde Park which are more accessible to the young-up-and-comings, but the majority of property in Hyde Park is grandiose and has a price tag to match. We’re talking enormous, old abodes where CEOs, MPs and other VVIPs reside. These are mansions with balconies that double as soap opera sets, indoor swimming pools, home gyms and sprawling lawns where soirées and canapés are the order of the day.

Flash freehold property in Hyde Park can set you back about R8m and then there are the super flash properties that go for anything in the region of R25m.

If it’s a lovely little flat you’re after, you’re looking at about R1,6m for a two-bedroom, two-bathroom spot.

According to Deeds office data, the most expensive property sold in Hyde Park over the past three months was R8,2m and the cheapest property sold for R1,3m.

We looked at the municipal value of the homes in one particular road in Hyde Park – Tweedale – and found that the average price of property is anywhere between R7m and R55m.

In terms of market stock, 56% is freehold, 38% sectional scheme and 6% of the properties in Hyde Park are estates.

According to property research experts Lightstone, the growth and activity in the area over the past few years has been impressive. Properties in sectional title schemes that went for R850K in 2004 were valued at around R1,6m in 2009. Freehold properties valued at R3,2m in 2004 were valued at R7,6m last year.

The market in Hyde Park is in very good health, too. In 2009, there were about 55 sales in the suburb.

So what makes property in Hyde Park so sought-after? It’s beautiful for a start: lush green gardens, leafy streets, huge stands (many with great views of Johannesburg north) and a nice mix of classy old houses, trendy homes and apartments too. Then there’s a great school, Hyde Park High, right in the centre of the suburb and one of Jozi’s most exclusive amenities on your doorstep: Hyde Park Shopping Centre.

Lydia Myers brought her two-bedroom two-bathroom townhouse in Hyde Park in 2006. She paid R950K for her 90sqm home.

“Hyde Park is just such a stunning place to live. I love how accessible it is from major roads like William Nicol and Jan Smuts – and then, of course, there are fabulous amenities right around the corner, like Hyde Park Shopping Centre.”

This is retail therapy at its best with a pick of the top boutiques and specialty shops around. From international brands like Pringle, United Colors of Benetton and Morgan, to local treasures like Jenni Button and Hilton Weiner, there’s something for everyone. Then, once you’ve done some damage on the credit card, you can go next door and enjoy a Cuban cigar on the deck of the new R190m Southern Sun hotel. It’s a great spot to bask in a splendid South African sunset. Article by Antoinette McDonald

For New Home Loans in Hyde Park  call 011.327.4489 or go to www.mortgagepluscc.co.za