- FAMILY CENTRAL: Areas like Sunningdale, with its good schools and proximity to shopping and medical facilities, are in demand on the Western Seaboard.
Cape Town’s western seaboard housing market from Milnerton to Melkbosstrand has shown remarkable average return on investment (ROI) of around 24 percent at the top end of the market above R5 million, followed by 18 percent in the price band between R 2.5m and R5m, both over the past seven years.
And in that same time houses in the R1.5m to R2.5m category showed an ROI of 16 percent and those priced under R1.5m a return of some 14 percent.
These are some of the results of an in-depth property survey undertaken by Lew Geffen Sotheby’s International Realty of one of Cape Town’s most desirable residential lifestyle destinations that offers something for everyone in property – from starter apartments to luxury seaside security golf estates.
“This market without a doubt represents the most stimulating and varied in Cape Town at present. Nowhere else in Cape Town do you find such a diversity of residential choices, this affordable and this close to the sea. It’s a market filled with new developments and it’s expanding by the day,” says company chairman Lew Geffen, who along with Atlantic seaboard franchise chief executive Brendan Miller has recently also taken over the western seaboard.
Geffen says since 2007 a total of 13 166 houses were sold worth almost R17.85 billion, and 5 020 apartments worth some R3.9bn were sold. On average house prices during 2014 stood at R1.635m for the whole area, and average apartment prices were around R900 000.
“Based on these figures, affordability is a major factor for prospective buyers on the western seaboard,” says Geffen.
He says 2 375 houses were sold in 2007 to the value of just over R3bn with the average house price at R1.265m.
“It’s very clear that this area was a major part of the boom that happened across the peninsula,” says Geffen.
“In 2008 came the worldwide credit crunch and the housing market bottomed out, with only 1 250 houses sold on the western seaboard worth R1.623bn. The average price was just slightly higher at R1.298m.
“Since 2008 the house market has rebuilt itself and in 2013, just five short years later, a total of 2 127 houses were sold to the value of R2.94bn – just short of the record year in 2007 in rand value and number of sales,” says Geffen.
Miller says the market has many points working in its favour. Key among these is the fact that it offers affordable prices, has a wide spectrum of choice to buy or to rent, it has the most affordable security estates in Cape Town and finally, iconic views of Cape Town can be captured from its beaches.
“The western seaboard property market is mainly driven by single title ownership (houses), but sectional title ownership is also high in demand and increasing steadily. From a property perspective the western seaboard is the only area left in Cape Town that has vast tracts of open development land.
“The market is ripe for considered, well-planned residential development because the country has a rapidly expanding middle-class and a substantial shortage of housing stock. One of the most exciting aspects of working on the western seaboard is the varied market.
“You have housing for everyone. For starter families you can still buy two-bedroom sectional title units for less than R500 000 in Parklands, but you can buy luxury right on the seafront in Atlantic Beach or Sunset Beach for up to R10m.
“The average house price improved by more than 25 percent from R1.265m in 2007 to R1.635m in 2014 and it is fair to say that favourable lending rates and a fairly stable economy in the past couple of years have contributed to the increase in house prices.”
Geffen says analysing the sales figures of 2014 year-to-date (1 527 house sales registered at the deeds office worth R2.495bn), the top end price band from R5m to R10m showed a lot more movement than in previous years – even before the credit crunch.
“For 2014 the total recorded at the deeds office so far is 37 houses sold to the value of R265m at an average value of R6.945m. During 2007 only19 houses were sold in this bracket, worth around R128m. In number of sales this price band improved by almost 100 percent,” says Geffen.
At the top of the area popularity list last year in the R5m plus price band comes Sunset Links Golf Estate which achieved the highest average value at R7.195m, followed by Big Bay at R7.08m, Bloubergstrand at R7.04m, Atlantic Beach Golf Estate at R6.8m, Sunset Beach at R6.19m and West Beach at R5.59m.
The average in the region for mid-range properties (between R2.5m and R5m) was around R3.45m, according to Geffen, but the largest movement was in the lower end of the market between R1m and R2.5m.
“Properties sold for an average of R1.445m in this price band but it definitely varies according to area, with Parklands, for instance, being generally more affordable than Blouberg.”
Miller says the sectional title market is also growing steadily on the western seaboard.
“The western seaboard offer buyers a wide choice in the luxury, middle and middle to lower end apartments at affordable prices with exceptional positions and large living spaces. Buyers can expect prices to range between R8 000/m² and R30 000/m² depending the location, type of finishes and condition of the apartment or sectional title unit.
“Luxury apartment blocks also offer a wide range of choices in the same development, depending on position, views and size. For instance, popular blocks such as Dolphin Beach and Ocean View in Table View and Eden on the Bay in Big Bay offer buyers units from around R1.5m to R5m,” says Miller.
“In general, the widest choice and sales of apartments, and most popular buys, are in the R1m to R5m price band.”
Geffen says many people who buy houses and sectional title units on the western seaboard do so because there is such a lucrative rental market in the area.
“There are excellent schools, the beachfront lifestyle is popular and with the MyCiti bus route makes the commute to town one of the easiest and fastest in Cape Town, so people want to rent there.
“The market on this side of Cape Town is generally long-term rentals, and depending on the property type and location houses can vary between R15 000 and R35 000 a month. Apartment rentals are generally between R5 000 and R15 000 a month, but there are some that are more expensive.”
Geffen says the western seaboard is a good location to invest in property.
“Whether you live there or you’re looking for a solid investment that will pay long term dividends while still delivering on monthly rentals, the western seaboard presents solid value for money across all price brackets.”