Convenient City Living lures Buyers to Cape Town CBD

The steadily growing demand for residential accommodation in Cape Town’s central city shows no signs of abating after a record year in 2014 when around 530 apartments were sold to the value of R856 million.

This two bedroom apartment in Cape Town City Centre, offers open-plan living areas. It is selling for R4.99 million – click here to view.

This is according to Lew Geffen Sotheby’s International RealtyAtlantic Seaboard CEO, Brendan Miller, who says the CBD apartment market last peaked during 2007 with 463 sales to the value of R730 million.

Miller says between January 2014 and June 2015, 682 sales took place to the total value of R1.093 billion.

“This equates to an average apartment price of R1.6 million at an affordable R20 160 per square metre, and when one considers all the amenities that come with city living, it’s reasonable when compared with Atlantic Seaboard apartments that easily sell at around R45 000 per square metre,” he says.

“We expect the average price per square metre in the CBD to increase quite dramatically towards the end of next year when several new developments in planning get to the transfer phase, though, so anyone considering an investment would be wise to move quickly before prices move into the realm of around R35 000 per square metre.”

Citing Deeds Office figures, Miller says a price band analysis of January 2014 to June 2015 shows that properties under R2.5 million have been most in demand, with around 570 sales realised to a combined value of R680 million.

“At mid-market level, almost 100 properties priced between R2.5 million and R5 million sold to the value of R313 million, and at the upper end of the market 13 sales in the R5 million to R10 million price band changed hands, with one property at 15 on Orange selling for R13.13 million.”

Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, says between 2008 and 2014, the growth in terms of rand values and sales volumes in the area was 174% and 131% respectively.

This apartment in Cape Town City Centre has two bedrooms and an open-plan kitchen and lounge. It is on the market for R3.99 million – click here to view.

“During 2008 the total rand value was R313 million, but by 2014 the total rand value had shot up to R856 million. Sales volumes over the same period of time went up from 230 to 531, while the average apartment price went up by 19% from R1.36 million to R1.612 million.”

Miller says the exponential growth in the CBD residential market has been spurred on by several key factors. Investor confidence in the growth trajectory of Cape Town’s CBD has inspired a major renewal of the city centre, as well as new commercial and residential development. Also, he says many commuters are simply no longer prepared to waste time in traffic, even if this means cutting back on living space and sacrificing ‘luxuries’ such as gardens.

According to the Cape Town Central City Improvement District’s State of the Central City Report 2014, the overall nominal value of all property in the CBD in the 2007/2008 financial year was R5.641 billion. In the 2014/2015 financial year, the value had more than quadrupled to R23.724 billion.

Miller says this shows just how confident investors are in the future of Cape Town’s CBD, both as a commercial and as a residential centre. He estimates that the residential population has grown to more than 6 000 inhabitants.

Geffen says the development in recent years has also had an excellent influence on return on investment (ROI) in the residential market in the CBD.

“The average nominal percentage ROI over four years as measured in 2015 is a solid 19%, with buildings such as The Adderley realising 21% over five years, Mutual Heights 23% over four years, Mandela RhodesPlace 17% over seven years and Cartwright’s Corner reflecting 13% over four years.

According to the Cape Town Central City Improvement District’s State of the Central City Report 2014, the overall nominal value of all property in the CBD in the 2007/2008 financial year was R5.641 billion. In the 2014/2015 financial year, the value had more than quadrupled to R23.724 billion.

“This certainly bodes well for investors looking at entering the CBD residential market as there are still many upgrades and developments in the pipeline which will increase the demand for accommodation, as well as push up the value.”

The Cape Town International Convention Centre is due to double in size and construction of the new Christiaan Barnard Memorial Hospital is well underway. Premium office space in Cape Town’s newest skyscraper, Portside, is also being taken up at a steady rate.

Two major residential projects in the CBD have been announced so far this year as well, which will add more than 200 units to the available residential market.

Geffen says certain sectional title developments were popular with investors between January 2014 and June 2015.

“Mandela Rhodes Place took the lead with 60 sales to the value of almost R120 million at an average of R22 000 per square metre. Senator Park, The Adderley, Perspectives and the Icon Building are also sought after, all realising more than 40 sales per apartment block with prices per square metre ranging between R15 000 and R30 000.”

Miller says more and more Capetonians are beginning to follow the global trend of trading in their suburban homes for the convenience of city living, and they are seeing that correctly priced apartments are, almost without exception, snapped up within four to six weeks of being listed.

http://www.property24.com/articles/convenient-city-living-lures-buyers-to-cape-town-cbd/23214

Cape Town City Bowl a Desireable Address

ape Town’s City Bowl is today one of the most desirable residential areas in Cape Town, attracting a broad spectrum of buyers and offering solid returns on investment.

This is according to Ryan Greeff, area specialist for Lew Geffen Sotheby’s International Realty, who says that data on Propstats clearly demonstrates the changing face of the City Bowl property market.

“In 2005, the average sale price of a freestanding home in Vredehoek or Gardens was between R1,6m and R1,8m, with areas like Tamboerskloof realising slightly higher median prices of around R2,6m.

“In 2015 to date, the average freestanding home in Vredehoek costs R4,8m and the average family home in Tamboerskloof will realise a sale price of just over R9m,” said Greeff.

Marthinus Botha, area specialist for Lew Geffen Sotheby’s International Realty notes that they are also seeing a lot of renovation in the City Bowl at the moment which is giving the area as a whole a refreshing face lift.

“Many investors are buying older properties within their budgets and then renovating over time, and we are also seeing existing owners sprucing up their older houses to increase the value of their properties.”

Although the entry-level segment is still the most active with an increasing number of investors keen to get their foot in the investment door, Botha says that there has been a notable increase in demand for properties in the R4m to R6m price band.

“Gardens and Vredehoek currently offer the best value for money at the entry level, with apartments starting at around R850,000 for a bachelor and R1,8m for a two-bedroom apartment. Older houses which need a little TLC can be found for between R3,8m and R4,2m.”

Lew Geffen, Chairman of Lew Geffen Sotheby’s International Realty, said several key factors have contributed to the turn-around of the City Bowl.

“Cape Town’s population has grown massively over the past decade and the resultant traffic congestion and ever-increasing commuter time from the suburbs has prompted people across the demographic spectrum to reconsider their priorities and lifestyle values,” he said. “The change in perception was also spurred by the fact that the City Bowl offers investors a wide range of options, from starter bachelor pads through to opulent modern homes, which makes the City Bowl accessible and attractive to most investors, from first-time buyers to established professionals.”

http://hometimes.co.za/2015/12/cape-town-city-bowl-a-desirable-address/

Popular Cape Town CBD helping the City Bowl residential market

Long considered to be the home of hipsters and trendy youngsters, Cape Town’s City Bowl has undergone an image transformation in recent years and is now one of the most desirable residential areas in Cape Town, attracting a broad spectrum of buyers and offering solid returns on investment.

This is according to Ryan Greeff, Area Specialist for Lew Geffen Sotheby’s International Realty, who says that data on Propstats clearly demonstrates the changing face of the City Bowl property market.

“In 2005, the average sale price of a free standing home in Vredehoek or Gardens was between R1.6 million and R1.8m, with areas like Tamboerskloof realising slightly higher median prices of around R2.6m”.

“In 2015 to date, the average freestanding home in Vredehoek costs R4.8m and the average family home in Tamboerskloof will realise a sale price of just over R9m,” says Greeff.

However, Greeff cautions that while demand for homes in the City Bowl will always remain high because of its proximity to the CBD, the slowing of the national economy and the move out of a seller’s market has affected this area just as much as the rest of the country.

Marthinus Botha, Area Specialist for Lew Geffen Sotheby’s International Realty notes that they are also seeing a lot of renovation in the City Bowl at the moment which is giving the area as a whole a refreshing face lift.

“Many investors are buying older properties within their budgets and then renovating over time, and we are also seeing existing owners sprucing up their older houses to increase the value of their properties.”

Although the entry level segment of the market is still the most active with an increasing number of investors keen to get their foot in the investment door, Botha says that there has been a notable increase in demand for properties in the R4m to R6m price band.

“Gardens and Vredehoek currently offer the best value for money at the entry level, with apartments starting at around R850 000 for a bachelor and R1.8m for a two bedroom apartment if one happens to come onto the market.
“Older houses which need a little TLC can be found for between R3.8m and R4.2m.”

According to Lew Geffen, Chairman of Lew Geffen Sotheby’s International Realty, there are several key factors which prompted the turn-around of the property market in the City Bowl.

“Cape Town’s population has grown massively over the past decade and the resultant traffic congestion and ever-increasing commuter time from the suburbs has prompted people across the demographic spectrum to reconsider their priorities and lifestyle values”.

“The change in perception was also spurred by the fact that the City Bowl offers investors a wide range of options, from starter bachelor pads through to opulent modern homes, which makes the City Bowl accessible and attractive to most investors, from first time buyers to established professionals.”

Geffen believes that the City Bowl is set to become increasingly popular as there is no more available land for development, while rapid development in the CBD is significantly increasing the daily working population in the downtown area.

“The city centre is benefiting greatly from investment running into billions of Rands, with massive projects like the recently completed 32-floor commercial Portside building, the doubling in capacity of the Cape Town International Convention Centre and the construction of the new Christian Barnard Hospital.”

Botha says that a spin-off of the increased business activity in the city is that more corporate investors are snapping up City Bowl properties as an investment or for their commuting executives.

“It also bodes well for the rental market which is currently very active, with agents experiencing a shortage of stock in certain areas and market segments”.

“Although correctly priced rental properties are almost always snapped up as soon as they hit the market, the monthly rentals that can be achieved vary substantially depending on a number of factors including size, location, condition, views and security.”

Greeff says that the current political uncertainty in the country doesn’t seem to have had much impact on foreign investment as particularly South Africans living abroad remain keen to take advantage of a weaker Rand and invest in property in Cape Town.

“They are attracted to the City Bowl for its conveniently central location which offers easy access to the inner city and its vibrant nightlife and is also a stone’s throw from some of the best beaches in the world and popular attractions like Table Mountain and the Waterfront”.

“In addition residents love the fact that they can quite literally stroll down the road to a wide array of excellent restaurants, cosy cafes and myriad retail offerings. There are also more and more regular events in the revitalised CBD such as First Thursdays, Moonlight Mass cycle ride and a number of markets.”

Popular Cape Town CBD helping the City Bowl residential market

Camps Bay achieves record sales in spite of market dip

The Glen side of Camps Bay has always been the most sought after part of this exclusive Atlantic Seaboard suburb, consistently achieving the highest sale prices because of its proximity to Clifton and the Camps Bay strip as well as its enviable wind-free position.

This is corroborated by a recent Lightstone report which revealed that Glen Road is the second most valuable street in South Africa. However, the Twelve Apostles side of Camps Bay which overlooks Bakoven has become increasingly popular and prices are now nudging the suburb’s record transactions.

A recent sale by Brendan Miller, Lew Geffen Sotheby’s International Realty Atlantic Seaboard CEO, achieved not only the highest Rand per square metre on the Apostles side of Camps Bay but also the highest sale price by an agent.

The 854.4m² state-of-the-art home sold for R47 million including vat at R55 009 per m², which is superseded by only two other sales in the area; one on Glen Beach and another in Bakoven. A third property, the Enigma estate, was sold privately earlier this year for an undisclosed amount after being on the market for R99m.

Miller says: “Camps Bay remains popular despite the overall slowing in the economy and housing market as it offers investors a wide choice in properties with its 60/40 mix of freehold and sectional title homes.

“The suburb also has an advantage over its immediate neighbours in that most of the houses are set on sizeable stands.

“What is notable is that much of the recent activity in the market has been driven by younger investors under the age of 35,” adds Miller.

“This is in line with the marked increase in first time buyer activity in South Africa in recent years, particularly within commuting distance of cities, as the young professional demographic has expanded.”

Lew Geffen, Chairman of Lew Geffen Sotheby’s International Realty Property says: “Investment in Camps Bay has always been lucrative, which is borne out by the fact that properties across all price bands have recorded on average a healthy nominal percentage return on investment of 16% per annum over eight years.

“And five years ago only around 10% of all freehold house sales were above the R10m price mark, while almost 40% of recent sales fall into this price band.

“Over an eight year period between 2007 and the end of 2014, the R10m to R20m price band improved by a whopping 138% from with a total of 16 properties sold to the value of R211m compared to only seven homes to the value of R88.98m in 2007.”

Miller says that Camps Bay also has a dynamic rental market with both long-term rentals and short-term lets commanding some of the highest rates in the country.

“Long-term house rentals now range on average between R30 000 and R70 000 per month, while owners can command in excess of R30 000 per day for an upmarket villa.”

However, while Cape Town’s luxury housing market has been on the up for over a decade, high-end properties in the Mother City are still cheap by international comparison, according to a recent report by Wealth-x and Sotheby’s International Realty, “Europe, Middle-East and Africa Luxury Residential Real Estate 2015” .

The weak Rand continues to attract foreign investors to areas like the Atlantic Seaboard as comparative luxury properties in sought-after areas were at least twice as expensive, with some even up to nine times more expensive.

The report’s authors calculated their luxury real estate rankings by comparing the price per square foot of properties valued at more than $1 million (R12m) and Cape Town was found to have the lowest average price per square foot, and the lowest average listing price for such properties, making it an extremely affordable and attractive investment prospect for international investors.

 

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