In the Western Cape, particularly in Cape Town, the use of “Price on Application” (POA) in property listings is becoming increasingly common, especially for high-end homes.
This trend is driven by one simple factor, exclusivity.
Basil Moraitis, regional head: Western Cape, Pam Golding Properties, said: “It’s simply because of the uniqueness and exclusivity of the property offering that the seller does not want to disclose the price until there is a qualified buyer who has expressed strong interest.
“It’s also that for the most exclusive and rare trophy properties that this kind of strategy is insisted on by the seller and it is a worldwide phenomenon in the very top end of the market.”
According to Adrian Goslett, CEO of RE/MAX of Southern Africa, an agent might request that the price appears as POA as a way to ensure that only serious buyers contact them.
A seller might also request that the asking price not to appear because they would prefer for this to remain private and would not want their neighbours, friends or family to know how much their home is worth.
When interested in a property that is listed as POA, Goslett said that the interested buyer will need to contact the agent to find out more about the home before the listing price will be revealed to the interested party. This can be a tedious process that has the potential to deter buyers.
“When choosing to list a home as POA, sellers must keep in mind that many buyers will simply scroll past a listing that does not list its asking price. This may have an impact on how quickly the property is able to sell,” Goslett said.
As a final piece of advice, Goslett recommends consulting a local real estate expert if unsure about whether to list the asking price. The real estate expert can then inform the clients of the various pros and cons of this option so that they can make an informed decision.
Why Estate Agents Use POA
Uniqueness and Exclusivity: Sellers of rare and trophy properties prefer not to disclose the price until a qualified buyer shows strong interest. This strategy is common worldwide for top-end market properties.
Privacy and Discretion: Sellers often prefer to keep the asking price private to avoid revealing their financial situation to neighbours, friends, or family. This is particularly important for high-value properties.
Serious Inquiries Only: Listing a property as POA helps filter out casual browsers, ensuring that only serious buyers, who are genuinely interested and capable of purchasing, make inquiries.
Market Testing: Sometimes, sellers or agents use POA to gauge market interest and buyer feedback before setting a final price. This allows for price adjustments based on the responses received.
Negotiation Flexibility: POA allows for more flexibility in negotiations. Without a fixed price, there is room for discussion, which can be advantageous in reaching a mutually agreeable deal.
Marketing Strategy: Using POA can create a sense of exclusivity and intrigue, potentially attracting more attention to the property. It can also drive engagement as interested buyers need to contact the agent for more details.
The Western Cape real estate market continues to see a surge in property prices driven by high demand and limited supply. The area’s scenic beauty, good governance, and strategic location contribute to this trend.
An analysis of the average selling prices in 2023 across the country by the Seeff Property Group showed that nine of the most expensive suburbs were in Cape Town.
Only Sandhurst from the Sandton-Johannesburg area made it into the top ten. Notably, there were three Sandton-Johannesburg suburbs in the top ten list five years ago.
In Clifton, South Africa’s most expensive residential address, the average freehold price has increased to R43.9 million, up 34% from a year ago. Jo Lombard, a luxury sales specialist with Seeff Atlantic Seaboard, said every property sold in Clifton this year has fetched more than R20 million.
Who is buying:
Six of the highest sales were to buyers from Gauteng, with prices ranging from R26 million to R66 million on the Atlantic Seaboard. German, Dutch and Uk buyers were prepared to pay
up to R59.95 million in Clifton and Camps Bay.
Overall, nearly 900 properties worth over R5.5 billion were sold across the Atlantic Seaboard and the City Bowl.
About 80% of these sales were sectional titles, primarily apartments. Freehold houses, while only 20% of sales activity, accounted for 43% of the total value (R2.41 billion).
Sales Breakdown
Atlantic Seaboard: 80% of sales were apartments, with only 20% being full title houses. Average prices are the highest in the country, with only 13% of sales below R3 million. Just over half (51%) were below R5 million, while 26% were above R10 million, and 9% exceeded R20 million.
Highest Prices: The top prices were R66 million in Clifton (Kloof Road) and R68.25 million in Camps Bay (Atholl Road).
Suburb Insights
Clifton: The most expensive suburb, with an average freehold house price of R43.9 million.
Camps Bay: Average price of R21.1 million.
Bantry Bay and Fresnaye: Average prices of R16.7 million.
Waterfront: Sectional title sales average R15.1 million.
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