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Hundreds of Big-Ticket Homes Sold in Top Jo’burg Suburbs
Category Property News
There are now at least five suburbs of Johannesburg where the average freehold home price is above R10m - and at least 114 homes in these areas have been sold in the past year, according to the latest research by Sotheby’s International Realty.
They include Rosebank and Sandhurst, where the average freehold home price is now actually over R16m, as well as Parktown, Dunkeld and Westcliff. (See Table 1 below)
“In addition,” says Lew Geffen, chairman of Sotheby’s International Realty in SA, “there are at least 15 other suburbs where the average price is now between R5m and R10m, led by Illovo and Sandown. More than 1000 freehold homes have been sold in these areas in the past 12 months while in Bedfordview, just to the east of the city, about 170 homes have been sold at an average price of R5,7m.
“What is more, Deeds Office figures show that the majority of these areas experienced substantial price increases in the 12 months to end-February, probably due to the fact that there has been an excess of demand over supply.”
This imbalance tends to occur more often in high-end areas, he says, because existing homeowners here are generally not under any pressure to sell, and are inclined to hang on to their properties for much longer when they see that prices are on the rise. At the same time, there are more buyers keen to upgrade to these areas and this creates a stock shortage that boosts values even higher.
“We can see the typical effects of this in Parktown, for example, where there has been a 71% increase in the average price over the past year despite a 3% decline in the number of sales, and even in Dunkeld, where the average price shot up by 112% even though the number of sales rose by only 7%.”
Meanwhile, notes Geffen, the research also shows that in the majority of areas where large volumes of sales have taken place in the past 12 months, the average freehold home price is between R1m and R2m.
“And robust activity in this lower price ranges bodes well for the future as it indicates a high number of first-time buyers coming into the market who will in due course be ready to upgrade and boost sales in higher-priced suburbs.”
The Johannesburg area with the highest number of sales in the past year was Kensington, where some 364 freehold homes changed hands, followed by Bryanston (358), Parkhurst (170) and Westdene (166). The high-volume area that showed the highest price appreciation (71%) was Orange Grove.
Author: Sotheby's International Realty