Unrealistic seller expectations hamper Mowbray and Rosebank
Category Property News
In the current marketplace, shifting investor priorities have nudged value for money and convenience to the top of most buyer's wish lists and few areas can match adjacent suburbs Rosebank and Mowbrayon both counts, however, unrealistic seller expectations are hampering sales.
This is according to Tina Malyon, Area Specialist for Lew Geffen Sotheby's international Realty who says that a conveniently central location and accessible pricing compared to high-value neighbours continues to attract investor interest but this does not translate into sales as often as it should.
"When demand for property in Cape Town spiked a decade ago, investors became aware of the suburbs' compelling drawcards, spurring previously slow markets and pushing up prices which steadily rose for several years.
"However, in a subdued market where increasingly well-informed buyers are spoilt for choice, 2017 prices are simply not achievable anymore and realistic pricing is critical to secure a sale."
Claude McKirby, the group's Co-Principal in the Southern Suburbs, says that the pricing shift is clearly reflected in the growing gap between asking and selling price and the time properties spend on the market.
"Propstats figures show that, on average in 2017, houses in Mowbray were sold for 3.9% less than asking price within 11 days and houses in Rosebank fetched 5.4% lower than advertised within 22 days.
"This year, homes are taking an average of 51 days to sell for 5.4% under asking price in Mowbray and in Rosebank sellers are achieving around 7.7% less than asking within 58 days."
He adds that despite a more cautious investor sentiment, well-priced properties in these suburbs are still being snapped, often within a month, but over-priced homes can sit on the market for six months or longer.
Malyon says that over-valuation by inexperienced agents and interns who don't know the market well or those trying to secure sole mandates in a tough market is exacerbating the problem as prices eventually have to be adjusted after already spending considerable time on the market.
"Due to their very convenient location, especially their proximity to the university both suburbs also have very active rental markets," says Malyon, adding that approximately half of the purchases now are investment buys.
"For between R2.5m and R3.5m one can buy a two or three-bedroom home in Mowbray with at least one en-suite bathroom and double parking and, for those with larger budgets, a stunning four or five-bedroom house in Rosebank with two lounges and a good size garden with a pool for between R4m and R5m.
"In neighbouring Rondebosch, similar homes will cost upward of R4m for a three-bedroom house and R5m for a home with four or more bedrooms, with most being in the R6m to R8.5m range."
Malyon concludes: "A decade ago, both suburbs were often overlooked as the domain of students and the arty set and the median house price in Mowbray and Rosebank were a very affordable R835 000 and R1.1 million respectively. It often took months to sell a property, with some homes remaining on the market for more than six months.
"It's now a very different scenario with strong demand from young families and professionals who have been attracted by the areas many compelling drawcards, including the value it offers, however, this demand can only translate into sales if homes are priced at realistic market-related prices.
Author: Lew Geffen Sotheby's International Realty