Buyers of luxury property respond to lower prices after Sona

Figures recently released by First National Bank (FNB) confirm what astute observers have known for some time – luxury home prices are static or declining in many of South Africa’s most sought-after suburbs and sellers are much more willing to negotiate – so this is the best time to buy in those areas.
This according to Rory O’Hagan, head of the luxury portfolio division of the Chas Everitt International property group, who was quoted in an article by Property24.
He indicated that there has been a surge in luxury home sales around the country recently and that this upturn is likely to gain even further momentum now in the light of the positive investor response to President Cyril Ramaphosa’s State of the Nation Address (Sona).
O’Hagan indicated that what this means for luxury buyers planning to upgrade to a bigger property, for example, is that there is an opportunity now to acquire more home for their money than they might have expected. “On the other hand, those looking to downscale may be able to afford a more upmarket location now, or more luxurious finishes, while those who have been trying to break into the luxury sector may well find that they can actually afford to do so now.”
The appetite for luxury property around the world, including South Africa, is currently also being boosted by volatility in equity markets, which traditionally prompts investors to turn to brick and mortar. “Locally, it seems that there may be an interest rate cut in July which would further boost demand but as things stand, we are already seeing a positive response to the lower prices in many of our heritage suburbs, where our luxury portfolio teams have sold more than R300 million worth of homes in the past few weeks.”
“Sales have been more muted in the estates, but our teams report increasing interest and we believe they will shortly also start to show a significant upturn in sales, especially following the assurances given in the SONA that there will be no interference with the independence of the Reserve Bank and that land reform will take place in an orderly manner,” O’Hagan said.
In short, there are some very exciting prospects for top-end South African real estate now, but as always in this sector, owners and sellers will get the most benefit if they work with a qualified and experienced estate agent offering personalised service to suit their individual circumstances, according to O’Hagan.