Property market on the up in Western Cape's Paarl
Predictions made a year ago that the Paarl residential property market could only go upwards have this year been more than fully fulfilled. On the flip side, however, this has made estate agents’ lives more difficult because finding sufficient stock has been more of a challenge than ever before.
This four bedroom house in Paarl has two living areas and a study. It is on the market for R3.3 million - click here to view.
This is according to Lizette Joubert, the RawsonProperty Group’s franchisee for Paarl, who says reviewing their sales figures for 2015, on average sectional title homes sold by her team were selling at an average of R685 000.
Full title homes averaged out at just over R1 million, she says. During the period 1 August 2014 to 31 July 2015, she says Cyberprop data reveals that 1 127 properties were sold, 118 sectional title and 877 freehold. In Paarl, Joubert says she estimates that sales prices this year rose by 7%.
She says some idea of how demand for housing has heated up can be gained from the fact that although average sales in Paarl over the last year have taken 119 days, her team has already had some exceptionally fast sales.
For example, in Northern Paarl a three bedroom, two bathroom home sold within two days at the full asking price of R1.495 million, while a three bedroom house nearby was sold in one week for a price of R915 000, and another in Northern Paarl with three bedrooms at R1.245 million was sold within one week at very close to the asking price.
Joubert says although it is now quite clear that tougher economic times, increasing cost of living outlays and other factors are impacting on buyer confidence, there is even stronger competition among Paarl buyers for the homes available.
This home in Paarl East, Paarl, offers three bedrooms and an open-plan kitchen. It is selling for R499 000 - click here to view.
It has become fairly common to find buyers willing to increase their bids if they are advised that their initial offers are unlikely to be successful, she says. Advice of this kind has to be very sparingly given and has to be based on complete honesty.
Joubert says the lack of stock is unfortunately leading to a minority of agents valuing at prices that are quite clearly unlikely to ever be achievable.
“It is true that in a volatile market it does become more difficult to price accurately, but when an agent values a R3 million home at R1 million more than our estimate, it is obvious that gaining the sole mandate is their only goal,” she says.
“One of the big drawbacks of this overpricing practice is that the much increased sale time which will inevitably follow can lead to a distressed buyer having their home requisitioned and sold on auction.”
Quoting John Loos, an FNB economist, Joubert says as in the rest of South Africa, the time has come in Paarl for new developers to move in and to move in fast.
She says it has been gratifying to hear from sources at the local municipality that well over 1 000 homes, most in large scale developments, are now awaiting approval at Paarl, and it appears likely that many of these will reduce the usual gap between new and second-hand property.