Growing demand for western seaboard residential rental properties

The growing demand for rental properties along the western seaboard has resulted in critical stock shortages in Blouberg and surrounds, with many homes being snapped up before they even hit the market.

Nancy Oeschger, rental agent for Lew Geffen Sotheby’s International Realty in Blouberg says: “The demand definitely outweighs available stock at the moment and we are experiencing an influx of walk-in and phone-in clients that we simply cannot help, due to the dearth in available properties, resulting in waiting lists in most areas.”

Oeschger says that a contributing factor is the fact that the western seaboard is becoming an increasingly popular destination for families who are moving to Cape Town from Gauteng and other parts of South Africa.

“We are now fielding five to seven calls a week from upcountry people saying they are moving down to Cape Town and require rental accommodation while they look for a home to buy, and this has caused the demand for six to 12 month leases to spike considerably.

“Families are flocking to the western seaboard as it more affordable than any other seafront suburb near the city, offering a great outdoor lifestyle with more open spaces, bigger erfs and well-maintained parks for children,” says Oeschger.

One of the fastest growing residential suburbs in Cape Town is Blouberg which offers a wide choice in property options, from modern lock-up-and-go apartments near the bustling beachfront to family homes up on the ridge and luxury houses with panoramic sea views.

According to Oeschger, the newer suburb of Sunningdale is very popular with young families as they are able to rent a modern three bedroom home from between R13 000 and R16 000.

“Parklands is also a great option for those on a budget, with house rentals averaging between R11 000 and R14 000 and apartment rentals starting at about R5 000.

“At the mid to upper-end of the market, areas such as Big Bay and West Beach are very popular and the return on investment in these areas is remarkable, with owners realising yearly rental escalations of at least 10 percent which was not always possible in the past.”

According to Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, the exponential and continued growth of the rental market on the western seaboard is a clear indication of the investment potential in the area; one that will pay long term dividends while still delivering on monthly rental returns.

Geffen says: “Looking back just six years, in 2009 a spacious family home near the beach was achieving a median rental of around R10 000, but the same property can now realise a rental of up to R20 000.

“There are few areas in Cape Town which offer the same return on investment as the western seaboard where the top end of the housing market realised a substantial average return on investment (ROI) of around 24 percent between 2008 and 2014.”

Oeschger also says that an increasing number of upcountry buyers are now investing in the rental market on the western seaboard.

“Aside from the return on investment, the area also offers buyers great value for money and the opportunity to enter the Cape Town property market and invest in a lifestyle they would like to enjoy in future years.

“Another strong motivation is that when it comes to tenant behaviour, research by Tenant Profile Network (TPN) has shown that Cape Town offers a lower risk of non-payment and injurious behaviour than in Gauteng.”

Lydia Johnstone, agent for Lew Geffen Sotheby’s International Realty, says: “Ongoing investment and development on the western seaboard over the past two decades has transformed the once unremarkable suburban area into a vibrant commercial and residential hub with an excellent infrastructure and many top class amenities, from excellent schools and medical care to an abundance of modern shopping centres and first rate restaurants.

“The western seaboard’s convenient location also offers good access to many key business centres, from the CBD and the industrial areas to Tygerberg and southern suburbs. The introduction of the MyCiti bus system has also added to the area’s appeal.”

Oeschger says: “Over and above the many very attractive features and advantages offered by the western seaboard, a major driving factor for families is the fact that residents still enjoy a strong sense of community along this coastline.”

Renewed Interest in Pinelands Residential Properties

The residential property market in Pinelands has shed its lethargy of the past few years, and renewed interest in the suburb is revitalising the market and pushing prices to record highs.

According to Propstats data, the median sale price of a house in 2009 was R1.7 million, with many properties remaining on the market for longer than six months; often for almost a year. The stagnation continued over the next three years and by 2012 the average sale price had only nudged up to R1.98m.

However, the tide changed in 2013 when the average house price breached the R2m mark by almost R400 000, with the average time spent on the market plummeting to 64 days.

Charlene MacPherson of Lew Geffen Sotheby’s International Realty says: “Since 2013 the market has continued to gain momentum and, just a year later, the median price of a house in 2014 had risen to R2.681m. To date, 2015 has continued in the same vein and has seen the average sale price increase exponentially to nudge the R3m mark at R2.9m.”

According to MacPherson, a notable contributing factor is the recent spike in demand from young families who are beginning to recognise that Pinelands still offers excellent value for money as well as being conveniently located with easy access to most of the Cape Town’s commercial and business nodes as well as numerous business parks and good schools.

“Compared to other suburbs so near to the city, in Pinelands you still get a lot of house for your money across all market segments. If you are lucky enough to nab one of the few apartments in Pinelands, you can still enter the market for under R1m, but the entry level price is usually around R1.3m for a small cluster home or R2.5m for an older three-bedroom house which needs a little modernising and TLC.”

MacPherson says that houses at the lower end of the market in the R2.5m to R3m price band are most in demand, and are snapped up when correctly priced, so agents are now experiencing stock shortages in this sector.

“I sold a house a couple of weeks ago for the full listed price of R2.7m within weeks of listing. We are also experiencing increased activity in the mid-market price band as demonstrated by the recent sale of a R3.4m house which was on the market for less than three months.”

Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty says: “The market revival in Pinelands looks set to continue into the foreseeable future with record prices now being realised. In August a luxurious double storey house fetched the highest price ever realised in the area when it was sold for more than R5m.

“Pinelands is often overlooked by investors who are unfamiliar with the area,” says Geffen, “as it can be perceived to hover on the periphery of the southern suburbs and the CBD; merely a suburb passed on the way to the airport.

“However, as one of the oldest and most established suburbs in Cape Town, Pinelands has a distinctive charm and has retained much of its village feel, which is a key appeal factor especially for those seeking a family-oriented environment in which to raise their children.”

Not only is Pinelands conveniently located near the N2 interchange, which offers residents the convenience of main routes in all compass directions, it also boasts a plethora of facilities and amenities which caters for all needs.

Says MacPherson: “People love Pinelands once they have discovered it. There are four excellent schools in the area, two main shopping centres as well as interesting shops and restaurants and excellent medical facilities are available at Vincent Palotti Hospital.

“Pinelands is known for its peaceful, tree-lined streets, well-tended sidewalks, well-maintained public parks and beautiful gardens and there are still many historic homes, including several houses with thatched roofs.”