Location has a real influence on prices

BERRY Everitt, managing director of Chas Everitt International, gives his take on the outlook in the property sector for 2015.

“I’ve said it before and I’ll say it again: National averages are pretty meaningless in the real estate industry, whether you’re talking about prices or the number of sales, simply because home buying and selling are highly localised activities.

“For example, even when the economy is sluggish, as ours is at the moment, there will be lots of home sales in areas where work is more plentiful.

“Prices in those areas will shoot up much faster than the national norm, which is what we see happening in towns close to new mines or where there are major capital projects under way.

“However, the same sort of discrepancies in demand and price movement can occur in different suburbs even within the same city.

“Areas served by the new rapid transit networks in Cape Town, Johannesburg, Durban and Pretoria, for example, are experiencing very high housing demand and growing shortages are driving bigger and faster price increases in these areas than in neighbouring suburbs.

“Some older suburbs close to CBDs are also experiencing a comparative revival at the hands of a new generation of buyers keen to avoid traffic and long commutes, while gated developments are doing well compared to traditional suburbs because of renewed concern among buyers lately about crime and personal safety.

“At the top end of the market, sales and prices have climbed really fast recently in areas specifically sought-after for trophy homes, such as Sandton, Waterkloof, the Atlantic Seaboard and the north coast.

“The long and the short of this is that Chas Everitt agents are currently achieving record after record at the moment, both record numbers of sales and record prices in scores of high-demand pockets around the country.

“For me, this just underlines the fact once again that we should never try to read the state of the property market by averaging out the performances of different areas, as it will always actually be good in parts and not-so-good in others.

“But based on our current observations, I have every confidence that there will be way more good than bad in the year ahead, and on that note, I would like to wish you all happy holidays, safe travels and a healthy and prosperous 2015.”