The Agency Year End Report - Looking Ahead with Optimism
Category press release
What an incredible first year it has been for The Agency Property Group!
Having celebrated our first anniversary earlier this month, we thought it would be a good time to reflect on our first year of operations and, perhaps more importantly, look ahead to what may lie in store.
2019 has been a challenging year. Truthfully, there has been a lot of uncertainty over the last couple of years, with tough economic conditions leading to a 'wait and see' approach and the property industry has been no different. This attitude has ultimately meant that there has been an oversupply of stock, which in turn has led to price corrections.
The property market, however, is cyclical in nature and it appears to be nearing the bottom of a down cycle. According to data from Lightstone, the graph below shows there has been a significant drop off in the number of registrations over the last couple of years and with just over a month to go, 2019 shows an almost 36% drop compared to 2017 in Sectional Title registrations and 62% in freehold registrations on The Atlantic Seaboard*.
*The graph above reflects the number of registrations in The Atlantic Seaboard (specifically the following suburbs - Camps Bay, Clifton, Bantry Bay, Fresnaye, Sea Point, Three Anchor Bay, Green Point, Mouille Point, De Waterkant and The Waterfront).
According to data from Lightstone, in terms of price growth The Atlantic Seaboard* has shown very good growth over the years, and remains a solid investment, particularly given the highly appealing luxury lifestyle which continues to draw both domestic and global buyers and investors. Sectional Title has seen a slight decline of 5.9% compared to 2018, while Freehold shows significant growth (mostly driven by the fact that Clifton only sold a handful of properties over 2018 and 2019 that were mostly on the upper end of the scale). It makes for interesting reading and we're always more than happy to provide detailed reports by suburb should you be interested.
*The graph above has taken the average of the median prices per suburb on The Atlantic Seaboard (specifically the following suburbs - Camps Bay, Clifton, Bantry Bay, Fresnaye, Sea Point, Three Anchor Bay, Green Point, Mouille Point, De Waterkant and The Waterfront).
According to cmainfo.co.za the average number of days on the market for Sectional Title units was 125, while Freehold was 111. This, coupled with the fact that there is an oversupply of stock at the moment, means it is tough for sellers to differentiate themselves when trying to secure a quick sale, meaning in turn, it is a good time for buyers. That said, serious sellers who use trusted agencies and price their property correctly are still achieving quick sales and market-related prices.
So where does this leave us?
In a word: optimistic.
There have been a lot of positives this year. The banking industry, for example, continues to show confidence in South Africa's property market by further relaxing their lending criteria and approving home loan finance at levels last seen 12 years ago. Home loan approval rates and 100% home loan approvals have both risen significantly this year. Interest rates remain steady, and if you haven't already, then now is a good time to renegotiate your home loan interest rates with your bank.
This year also saw the election of Cyril Ramaphosa as president and while he hasn't made any big statements, it seems he is doing his level best to clean up behind the scenes and turn around the dire situation of the state owned enterprises. It would, of course, be great to see the Ramaphosa-led government coming to the party and reducing transfer duties, which would in turn stimulate the property market and in fact, potentially increase government revenues, although this may be wishful thinking for now.
This year also saw the Springboks lift the 2019 Rugby World Cup. An incredible victory for the Springboks and South Africa. The power of positive sentiment cannot be underestimated. The key is to maintain that momentum - and hope - in order to really drive change.
So, while the past few years have been unstable and have justifiably been cause for concern, there is reason to be cautiously optimistic for the upcoming year.
Given the tough market conditions the industry has faced, we could not be prouder on our progress this year. We have managed to establish a brand in one of the most highly-competitive markets in the country and have gone toe-to-toe with some of the biggest agencies in the country. We have leaned on each other throughout the process, but we wanted to take this time to thank every one of our clients, friends and partners who have been involved with us along the way.
We cannot emphasise enough how important these relationships are to us and it is one of the reasons we chose to establish our unique boutique-style agency, so that we can really ensure we keep our business flexible and personable. While we intend to grow our team in the new year, we will never stray far from this model as we go forward as a business.
We cannot wait to head into 2020!
Author: The Agency Property Group
