ANOTHER senior figure in the Cape property development sector says the asking prices for Cape residential land and the offers put in by some developers in this sector are beginning to be unrealistic.

John Weaver, executive director of Inframax Developments, the residential and commercial property developer, said he was concerned that some land sellers seemed to think the bull run enjoyed by Cape property for the last 24 months justifies prices way above those of only a year ago.

"The market, although booming, is still by and large made up of shrewd investors who compare prices across the regions, who watch interest rates closely and who know what returns are obtainable," said Weaver.

"It is worrying that certain land sellers and developers seem to be losing sight of this or to believe that a deus ex machina, such as a significant drop in interest rates, will keep them on a winning streak." His comments were prompted by a recent tender for a site in the northern suburbs.

The site is zoned for a range of possible housing developments: group housing with 300m2 plots, a retirement village of about 150 units or a sectional title project of about 170 units. Inframax, tendering through their associate New Housing Company (Newhco) which handles retirement villages along with its other activity of low cost housing, put in what they considered a "highly competitive" bid at a price of R8 million. This was in line with prices submitted by other well known Cape property developers and was some R300 000 higher than the average price of tenders received.

"What amazed us," said Weaver, "was, firstly, that there were no less than 24 tenderers and, secondly, that the highest prices were all above R11 million, with the highest of them being in excess of R15m. We think that it would be hard to make a profit on a project at that land price. "In a tender of this kind," he added, "much will depend on how one foresees the market developing. "We believe that the Cape residential market, which is now attracting developers from far and wide, still has a lot of life in it before an oversupply situation begins to be evident, but certain of the land sellers seem to be expecting significant value rises in perpetuity - which will not happen."

Buyers of products in new developments, said Weaver, might be well advised to give preference to projects handled by tried and tested developers with the resources to see their developments through periods when sales might take a long time. Asked how Inframax saw its future over the next 12 to 24 months, Weaver said the company expected strong growth and that it would be involved in residential development throughout the country, including the Western Cape, Gauteng and KwaZulu- Natal.