Prices of sectional title properties have risen substantially in Rondebosch over the past two years with total sales increasing by nearly R38 million as demand for accommodation increases in this sought-after suburb close to the University of Cape Town.
In 2013 60 sectional title units in the area were sold for a total of R70 015 500, and in 2014 73 units were sold for a total of R107.844m. And average sales prices rose from R1.1m in 2013 to R1.4m last year, says Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty.
“Properties sold on average within 50 days in 2013, which came down to an average of 39 days in 2014. The only properties not selling within just over a month of being listed last year were typically those that were over-valued or over-priced.
“The fact that the average selling price is so clearly on the rise is certainly a sign that we’re in a seller’s market, particularly in the sectional title arena.”
Arnold Maritz, Lew Geffen Sotheby’s International Realty co-principal for the area, says that one of the reasons for this large increase in sales is the fact that there have been a number of new sectional title apartment developments in Rondebosch over the past two years.
He says: “Rondebosch is primarily a residential suburb in the southern suburbs with a medium size shopping area as well as a small business district. It’s best known for its excellent schools and also for its proximity to UCT, which makes it highly desirable from an investment point of view.
“One of our big markets is parents buying apartments for their children while they are studying, because they know how much the value of their properties will increase over the three to seven years in which their children live there.
“Another big market is investors buying up units in bulk to rent to students, because UCT supplies an endless rental pool and accommodation in the area is scarce.”
Proximity to the Jammie Shuttle that runs to and from University of Cape Town through Rondebosch is a vital driver for the demand in student housing in the area.
Maritz says that buyers tend to find the older flats in the suburb to be very good investments. The levies are lower than many of the new developments and the older sectional titles are usually larger. Also, if the body corporate has been well managed, the accumulation of funds over time helps keep monthly levies low.
This means that often the capital appreciation might be greater as buyers are not paying in at a new block rate.
Maritz says: “In the older sectional title developments buyers are more likely to find features such as landscaped communal gardens, high ceilings and well-proportioned rooms.”
Geffen says: “There isn’t enough accommodation in the area, which has prompted so much new sectional title development. Because modern units tend to be smaller they are often more affordable as a capital investment, but prospective buyers should be calculating the entire monthly expense, including levies, when they’re deciding on a property.
“Whether choosing old or new, though, there’s no question that Rondebosch is a good suburb in which to invest and sectional title is the most affordable way to do that.”
Table View, with its long expanse of beachfront, excellent shopping facilities and superior schools, represents one of the most dynamic property markets in Cape Town with property sales last year of more than R300 million.
This is substantially higher than in 2013, says Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, and demonstrates how rapidly buyer demand is growing for this family-orientated suburb on Cape Town’s western seaboard.
In 2013 the total value of property sold in the suburb was around R215m.
Citing figures from Propstats, the property sales aggregation website of the Western Cape branch of the Institute of Estate Agents, Geffen says more than 260 properties changed hands in Table View in 2014.
“That’s nearly 60 more than in 2013 and represents an increase of close to 30 percent in overall property sales year-on-year, which is remarkable,” he says.
Last year, properties worth R302.378m were sold, of which just over R175m were houses and about R127m were sectional title units.
“One of the biggest drawcards of the area, though, is its affordability,” says Geffen. “Average house prices there last year were just less than R1.3m, and the average price of sectional title units was around R1m.
“But this still represents a substantial increase in value year-on-year. In 2013 average house prices were around R1.14m and sectional title units averaged just over R900 000. This means the value of the sales market increased by around 13 percent for houses and just over 10 percent for sectional title units from 2013 to 2014.”
Geffen, who along with the chief executive of the Lew Geffen Sotheby’s International Realty Atlantic seaboard franchise has recently taken over hands-on management of the western seaboard branch, says according to 2011 Census figures, Table View had about 25 000 residents.
“But that number is growing swiftly as we see new developments completed, and who wouldn’t want to live there? It’s just 17km from the CBD, and with the new rapid bus transport system it means nobody has to sit in traffic anymore.
“The area also has beautiful beaches, is world-famous for kite-surfing and the adjacent Rietvlei lagoon is used for any number of water sports. Combine that with top class shopping, two hospitals, superior schools and a wide variety of restaurants and entertainment facilities to choose from, and as a resident one would almost never have to leave Table View,” says Geffen.
He says many buyers in the suburb are young families and first-time homeowners.
“If you compare prices in this area to other parts of Cape Town, there’s absolutely no doubt that it represents phenomenal value and a great place to get your foot on the property ladder.
“Property prices in Table View rarely exceed R5 000/m², whereas in suburbs along the Atlantic seaboard like Green Point – that are still considered to offer very good value for money for their location – you’re probably looking at between R20 000/m2 and R30 000/m² on average.
“And on the southern suburbs side, in an area like Claremont you’re also easily looking at between R10 000/m2 and R20 000/m² when you buy a property.”
Geffen says the massive increase in sales between 2013 and 2014 means that prices in Table View will increase along with demand.
“It’s a good time, if you’re in the market, to consider options in Table View. Any property you look at now, is likely to be at least 10 percent more expensive next year, so the time to buy is now.”
The average price of freehold properties in Green Point, with its quaint Victorian cottages and modern conversions, has risen by more than R1.3 million year-on-year as buyers are prepared to pay a premium for homes in this coveted suburb just minutes from the CBD.
According to Propstats, the statistical data service set up by the Western Cape branch of the Institute of Estate Agents, 29 houses were sold in the suburb in 2013 for a total of R112.212m. The average house price was R3.869m.
Last year there were three fewer confirmed house sales in Green Point, but the 26 houses that did change hands earned owners a substantial R135.215m and the average price of properties rose to R5.2m.
The most expensive house sold in 2013 was a free-standing double storey home on Ocean View Drive that was listed at R8.9m and sold for R8m cash, after being on the market for only 12 days.
The home has four bedrooms, four garages and two parking bays.
Last year, according to Propstats, the highest price achieved was for a five-bedroom older house that was sold for R8.5m cash just 13 days after listing.
According to Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, these two sales are typical of the area, because on the Atlantic seaboard cash property sales are the norm, rather than the exception.
“In our experience more than 80 percent of property transactions across all suburbs in the area are cash, which is at least 30 percent higher than the average across the rest of South Africa where most people buy homes with bonds.”
Geffen says the most desirable locations in Green Point to buy houses, and where the most expensive properties are often to be found, are Springbok Road, Merriman Road and Ocean View Drive – all three high up against Signal Hill with magnificent views across the Cape Town Stadium, Mouille Point and Table Bay.
“Houses in those streets command premium prices. Some are on the market for more than R10m and I believe this year in the current seller’s market they will achieve their listed prices, or close to them.”
He says last year the average price of houses sold in Green Point was R5.2m, but most houses are on the market this year with list prices above R6m.
“You can still find the odd unrenovated two-bedroom period cottage for between R3m and R4m, but most are being marketed for between R6m and R12m and there are properties for sale for up to R24m.
“Green Point used to be one of the most affordable areas on the Atlantic seaboard, but its location next to the CBD and the stylish bars and restaurants of De Waterkant now makes it highly desirable for younger, trendy buyers who don’t want the hassle of fighting rush hour traffic and want the convenience of city living right at their doors.
“The opening a couple of years ago of an Atlantic seaboard Reddam House in the suburb has also made Green Point extremely attractive to families who want good schooling for their children. The school offers classes from pre-primary to matric, so once a child is admitted as a pupil parents are generally reluctant to give up that coveted place in the classroom by moving.”
Geffen says although house prices in Green Point are increasing rapidly, the suburb remains extremely good value for money.
“Just down the road in the V&A’s Front Yacht Basin prices for certain apartments rose above R90 000/m² last year, but not one house sold in Green Point in the same period for more than R30 000/m². Because the houses are generally older they also have larger rooms, so you tend to get far more space for your money than you would in newer suburbs.”
Geffen says Green Point is an increasingly good investment prospect, and arguably presents the best value on the Atlantic seaboard.
“There is limited residential space in Cape Town’s CBD and far greater demand than there is supply. That spill-over of people wanting the city lifestyle is a large wave crashing into De Waterkant, the Waterfront Canals and Green Point, and now is the time to get into the market because prices will only go up.”
Although Claremont is virtually synonymous with trendy Cavendish Square and quaint semi-detached cottages, it is increasingly sought after as a “starter home” location as more and more apartment developments come on-stream in the suburb.
And the price of flats in the area is climbing fast.
Claremont offers several options for buyers in the lower to mid-price ranges. According to the Western Cape property sales aggregation website Propstats, 105 apartments were sold in Claremont in 2013 worth a total of R134 691 500. The average sale price a unit was R1.28 million.
Last year, the average unit price climbed substantially to around R1.57m – an increase of nearly R300 000 or more than 20 percent.
The number of sales last year increased to just over 120, according to Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, but just 18 more sales delivered an overall annual sales value increase of around R60m.
Geffen says demand for apartments in Claremont is so great that most accurately priced properties are selling in less than three weeks. Some are selling within days of listing.
“Claremont is a prime location because of its proximity to the shopping and entertainment amenities of Cavendish Square and surrounds, as well as being in the middle of the of the feeder zones for some of Cape Town’s top schools.
“And if one is talking apartments in the area, affordability is the key factor driving this market because it’s an easy stepping stone onto the suburb’s property ladder.”
Geffen says it’s still possible to buy two-bedroom apartments in Claremont for less than R1m, although they are becoming increasingly rare.
“Those tend to be the ‘fixer-upper’ flats in the older blocks that need largish renovations – particularly to bathrooms and kitchens. Units in the newer buildings with all the mod-cons are priced around R800 000 for studios, R1.3m for one-bedroom units and in the region of R1.8m for two-bedrooms. Newer three-bedroom flats will be above the R2m mark.”
Apartments in Claremont are generally priced between R20 000 and R30 000/m².
Geffen says prices in Claremont have also increased because of demand from upcountry buyers, exacerbating the shortage of stock in the area.
One of the main reasons why the suburb is so popular is the attractive mix of properties, abundant shopping and the proximity to cricket and rugby facilities. And with its easy access to most highways, Claremont is just 10 minutes from the centre of Cape Town.
The proximity to facilities and transport options has also attracted a wide variety of buyers including a number of medical professionals working in the nearby hospitals and local medical practices.
Another strong driver of sales is the establishment in recent years of several asset management companies in the Claremont area, whose young employees have been attracted by the secure lifestyle and the convenience of living close to work.
“The concept of being able to live, work and play in the same area appeals to many residential property buyers, especially young professionals who don’t want to spend a large percentage of their income or time on commuting,” says Geffen.
In the first three months of 2015 there have been close to 30 confirmed sales of flats in Claremont, earning sellers a total of R38.727m. Geffen says the fact that the average sale price is just 4 percent below the average listed price is a clear indication that this market is still very hot and is likely to remain that way for the rest of the year.