No sign of a downward trend in SA property market

Despite reports of a deceleration in sales in the wider SA residential property market in the past year, Lew Geffen Sotheby's International Realty has reported a 54% increase in turnover for the financial year ended February 2007.

"This is despite ongoing rumours regarding a cooling of the market and buyer resistance in the wake of last years interest rate hikes", says Barak Geffen, Executive Director of Sotheby's International Realty South Africa.

Contributing to the substantial rise in turnover was a 25% increase in the average price of homes sold by the group, which rose from R1.218 million for the previous year to R1.5 million for the last year, Geffen adds.  The company outperformed the general market - the ABSA house price index showed house prices rose an average of 14% y/y in the fourth quarter of 2006, accelerating to 15.4% y/y in February.

"This is a direct result of the organisation gaining more market share among astute property investors in the upper price segments who are seeking out the service delivery provided by a world-class realtor," he explains.

"We are 21% up on sales volumes for the year, excluding sales volumes from new office openings. This reinforces the increase in business being generated by our established franchisees across the country.

"In the last few months leading up to the end of the financial year we concluded some of our biggest sales to date, breaking record prices along the Eastern Cape, Garden Route, Cape Town's Atlantic Seaboard and Johannesburg's most sought after suburbs".

In the last two months alone, Lew Geffen Sotheby's International Realty, Atlantic Seaboard, generated sales in excess of R120 million in value.

"With buyers safe in the knowledge that interest rates are not likely be hiked further this year, in light of the Reserve Bank Monetary Policy Committees decision in February, we expect to see sustained buoyancy at the lower end of the market this year. Our view is supported by recent stronger-than-expected housing market data, which has prompted many economists to upgrade their house price growth forecasts for 2007.

"Meanwhile, the heat at the top end of the market is being sustained by a constant stream of international buyers investing in what to them remain exceptional properties, in a beautiful country, at bargain prices relative to global norms."