Seeff Pinelands Market Matters

Seeff Pinelands Market Matters

Category Branch Article

The Seeff (Property) Market Monitor

Editor Johan Meyer

So, this is the first of our quarterly Newsletter on the happenings in the Pinelands and Thornton Property market. We will be providing our subscribers with the latest in Sales and rentals as well as the general market conditions in the area.

In this edition, we discuss what has happened to the residential market in the past year and compare that with 2022

Rentals

The rental market both in Pinelands and Thornton has been extremely buoyant mainly as a result of the high costs of borrowing as well as the tightening of the lending criteria by the banks making it difficult for first time buyers to enter the market with renting the only other option. There is very little available accommodation and anything that is reasonably price is snapped up.

We have just completed sales of 103 units in the new Rabie Development, PineworX, situated in Lonsdale Way and all available rentals have been taken up. There were 8 Studio apartments which went for R7500 pm, whilst the one-beds have gone from R9500 to R10000 and the two beds from R12000 to R13000 pm, which gives the owners a return of around 8% pa. Because the building, being a "Smart" development, is brand new with levies on the lower side there are minimal cost for the owners. The water and electricity are pre-paid. The demand for any rental below R8000 pm is so high that we receive more than 50 enquiries the moment any property comes up for rent at that price. There is also big demand for "granny flats" around R6000 pm.

Demand for freestanding 3-bedroom homes is anywhere between R16000pm up to R20000 with 4-bedroomed homes going for as much as R25000pm. Like with anything, at the top end of the market where homes are advertised above R30000 pm there are not many takers. We are also finding that clients credit profiles are poor with only about 2 out of every 10 applications qualifying in terms of our strict lending criteria.

We currently manage in excess of 179 properties in Pinelands and Thornton and at the time of writing only one tenant was in arrears.

Sales 

There has been a marked decrease in the number of sales in the area. In Pinelands the number of registrations decreased by 20% from 234 units in 2022 to 188 in 2023 and in Thornton by 32% from 86 units to 58. The total value of all sales in the area has also decreased by more than 35%.  The property prices in both areas have remained flat for the past two years with very little increase in prices. The average price in Pinelands is R3,5m down from R3,6m and in Thornton at R2,25m roughly the same as last year. This has meant that there has not been any increase in the average property prices since 2021 where there was a mini boom after the Covid epidemic.  A large number of our buyers are semi-grating and finding Cape Town prices steep. There are also many sellers down-scaling to smaller homes.  

The biggest demand for properties remains in the R3m to R4m range in Pinelands and under R2,5m in Thornton. The average Sectional Title units sell for R1,4m but units in well maintained and popular blocks still achieve numbers above R1,8m. Buyers have become very cautious and want to know the financial state of the Body Corporate, especially the monthly levies. Unfortunately, many of the older building in Pinelands now need upgrading and often require large special levies as they have insufficient funds in reserve which in turn puts further pressure on the owners.

We are often asked what where the highest prices ever achieved in the area. So here are the numbers.

In Pinelands the highest price for a freestanding home which was situated in Links Drive sold at R7m.in 2021. In 2022 there were 2 homes sold and transferred for more than R6m in Pinelands and in 2023 only one at R6,2 which was in Letchworth and sold by us.

In Thornton there were two sales above R3m in 2022 with the most expensive that of a home in Matopo Road at R3,2m, which also happens to be the highest price ever achieved. In 2023 there was only one sold for R3m and that was in Protea Road.

If you go to Property24, which is the most visited property portal, you will note that there are now more than 200 properties advertised in Pinelands and 60 in Thornton. Many of these homes are advertised by more than one agency and they are often overpriced. There seems to be the perception amongst sellers that the more agencies you employ the quicker your home will sell home and the more you will achieve. As can be seen from Property24 this is not true. Many of these homes have been on the market for more than 3 months. A home that has been on the market for more than 30 days with no offers is deemed overpriced and becomes "shopsoiled". When they do eventually sell it is often as much as 15% below asking price. The national average time that it now takes to sell properties is in excess of 80 days which is almost double that of two years ago. Homes correctly priced should sell for about 95% of asking price in roughly 40 days.

Conradie Development

The Conradie Development is now in full swing but to date we have not yet seen any transfers registered so we are unable to give you any accurate statistics as we are not able to verify the numbers with any accuracy. We source all our statistics from Lightstone which is considered the premium source for information on registered transfers of properties in South Africa.

Legal

Some advice to prospective sellers. With banks tightening up on their lending criteria it is important that sellers ensure the following:

• That all improvements on their properties have approved plans as this could delay the transfer. Financial institutions are becoming more and more fussy when granting mortgage loans
• That you only use qualified agents who are registered with the PPRA (the old Estate Agents Board) now known as the Property Practitioners Regulatory Authority. Remember without a Fidelity Fund Certificate you have very little protection from unscrupulous agents.
• Ensure that you sign the Property Disclosure Document to protect yourself from later claims by a buyer who now wants to hold you responsible for defects not disclosed.

Finally, at Seeff Pinelands we had the best year ever since 1974 despite the softening of the market and can confirm that we sell 1 in every 4 properties sold in Pinelands and Thornton.

We trust that you have enjoyed the read and if you wish to subscribe please do so by emailing us at pinelands@seeff.com or meyer@seeff.com or come visit us at our brand new offices in PineworX, Lonsdale Way Pinelands. We would love to meet you and treat you to FREE Coffee at Bootleggers.

And that is a wrap for 2023

The Seeff Team

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