Western Cape market appears to be gaining momentum

While the overall national residential property market is improving only moderately, the Western Cape market appears to be gaining momentum. Seasonally, the Cape market tends to slow in the cold, wet winter months, experiencing its highest sales activity in mid-summer.

However, Pam Golding Properties has achieved excellent quarterly results for the mid-winter period from June to August despite this winter having been colder and wetter than usual. And the trend is continuing.

Cape Town’s Atlantic Seaboard is an outstanding example. The PGP office sold 34 properties during August alone. Total value was more than R158 million topping the previous record figure of R146 million. Sales in June and July brought the total sales figure for the mid-winter quarter to R326 million.

Area manager Basil Moraitis says demand is spread across location and price brackets, from R900 000 apartments in Green Point to R30 million luxury homes in Bantry Bay. “A number of sellers who had been waiting for the market to turn felt this was an opportune moment to accept good offers,” he explains, adding, “In general the Atlantic Seaboard is a very mature market, with a history of being relatively recession-resistant.

Buyers who want the iconic lifestyle just won’t settle for anything else.” Nearby Sea Point and Green Point, the latter adjacent to the new sports stadium and the V&A Waterfront, are enjoying brisk trade. Moraitis says the appeal of this area has grown over the past few years due to such factors as the establishment of the Green Point Urban Park and the development of the commercial area as a hub for the media and advertising industries. “There has been a lot of activity in the sectional title market, but for those who still want a solid family home with a secure garden there are numerous options.”

Other Cape Town nodes such as the City Bowl are also doing well. “In the really active areas we are experiencing a shortage of stock,” says Laurie Wener, Cape Metro MD. “To some extent volumes have dropped, but the market is still dynamic. “ Wener adds that the lower end of the Cape Town market (R1 million – R3 million) has picked up considerably, and the middle market (R3 million – R9 million) “is doing increasingly well as more mortgage dependent buyers enter the market.”

A relatively high percentage of sales in the Cape market is cash sales, Wener adds.” Regarding mortgage bond approvals, the pattern fluctuates from bank to bank and week to week. Most lenders want 10%-20% equity, but there is a smattering of 100% loans in the lower cost housing bracket.”

The traditionally steady suburbs continue to be active. “Newlands is very buoyant;Rondebosch is perennially in demand for practical reasons such as school and university proximity. Desirable property is selling in Upper Claremont, Upper Kenilworth and Trovato Estate in the R5 million and above range, and Tokai is doing well.”

PGP Newlands agents Heather Turner and Vickie Francis say the appeal of Newlands includes its convenient position – close to schools, the university, sporting facilities, shopping malls and leisure facilities. The suburb offers easy access to the city via the M3 highway. Its scenic setting close to Table Mountain National Park, Kirstenbosch Gardens and Newlands Forest is a huge drawcard.A hop over Constantia Nek and you’re in Hout Bay, Chapman’s Peak coastal drive and over to the stunning beach at Llandudno.

The agents note that secure estates enjoy a considerable price premium in Newlands. Family homes in leafy Fernwood are normally priced at between R4 million and R6 million, “but when located within secure estates prices rise to R9 million and beyond.” One example is“Riversong” estate in Riverside Road, which runs along the Liesbeek River. PGP’s recent sales included a 4-bedroom home which sold for R9,75 million.

Laurie Wener acknowledges that the Cape is an extremely competitive market. “When times are tough the public begins to appreciate what a big estate agency brand has to offer.” An interesting aspect of the Western Cape market as a whole emanates from a recent survey by First National Bank. This indicates that market strength in the Cape Metro is greater than in the rest of the province. In interpreting this, FNB comes to the conclusion that the reason is basically the difference between primary residential demand and non-essential buying, ie “getaway” property interest in the country areas.

The bank’s survey also found that there has been some improvement in the buy-to-let market, suggesting greater confidence and an “improving financial position of a portion of households.” Yet another indicator to emerge from the survey is that of greater price realism. There has been a significant decline, says the bank, in the percentage of houses being sold at below asking price.

The city’s Northern Suburbs are experiencing high levels of activity in the lower ranges between R750 000 and R2 million; higher end properties are taking longer to move, mainly because of sellers still asking unrealistic prices. Currently, there is a shortage of homes in Welgemoed and Durbanville priced between R2 million and R2.5 million.
PGP’s area manager for Boland and Overberg, Annien Borg, says that while the north has some spectacular high-end homes which can fetch upwards of R20 million, it should not be thought of as a suburb only for the wealthy. “One can obtain entry-level apartments from R500 000 to R1 million, while a townhouse or cluster home will cost between R900 000 and R1.6 million. Midlevel family homes are priced anywhere upwards of R1.6 million. “These prices,” adds Borg, “are substantially lower than one would pay for equivalent properties in other parts of Cape Town.”

Along the coast to the east, towns from Gordon’s Bay to Stanford have enjoyed increased activity – in particular the popular holiday town of Hermanus. Notable sales there include a R15 million spectacular 5-bedroom home on the seafront in the Voelklip area, and four properties between R6,5 million and R13,2 million and a R4,85 million cliffside property in Sandbaai. “Neighbouring Onrus has also done well with R40 million, says Borg.

In Stellenbosch there has been a surge in sectional title sales from parents seeking accommodation for their student children. “Demand for student housing makes apartments close to campus or a
dedicated transport network (there is a new route to and from Somerset West) a sound investment.
Andringa Walk in the heart of Stellenbosch is an excellent opportunity, with prices starting from
R1.4 million, rising to R3,35 million. To date PGP has concluded sales to the value of over R75 million.”

Also in Stellenbosch is the Brandwacht Aan River development. There, PGP sold most of the plots within a couple of weeks, and now building is going on at an exceptional rate, adds Borg.

Franschhoek remains popular, particularly for properties below R3 million. Investment opportunities include the Two Rivers development along the Berg River, the Val de Vie Polo and Wine Estate between Franschhoek and Paarl, with the Paarl Valley and Boschenmeer Golf Estate on either side.

Pam Golding Properties is about to launch a plot and plan development, Stadsig, in the historic town of Wellington. Prices start at R745 000 fora completed 2-bedroom home. This follows the successful Diemersfontein Village developmentwhere PGP has already sold more than 40 units.

The ongoing upgrade of the N7 between Cape Town and Malmesbury is improving access tothe Swartland towns. “We are already seeing the impact on the market, says Borg. “There is renewed weekend getaway interest in the quaint town of Koringberg, close to the Misverstand Dam. There one can acquire a plot for R200 000or a house for as little as R800 000. Our Riebeek West office had one of its best months ever in September.”

More buyers are discovering the hidden gems of the Overberg towns, such as Greyton, Caledon,Villiersdorp, Swellendam and Riviersonderend– all areas which offer very affordable propertyand lifestyle. In Riviersonderend, for example,entry level homes start at as low as R400 000.

Retirement homes are growing in popularity inthese areas. A new frail care and assisted livingsectional title facility is about to be launched inGreyton with units starting at R599 000.

The Cape’s starkly beautiful West Coast continuesto open up. In relatively close proximity to
Cape Town, Yzerfontein and the neighbouringinland town of Darling are attracting buyers. In
Yzerfontein, PGP sold a property for R7.2 million– the highest price recorded in the town for
several years. Hotspots, comments area manager, Stephanie Wynne-Cole, are beachfront plots,
elevated plots with uninterrupted sea views and beachfront houses. Highest percentage of sales is between R1 million and R2.5 million. “Most buyers are from the Boland areas and Cape Town who are looking for second homes,” she says. There is some foreign interest, mainly tourists, she adds.

Further up the coast is the great natural harbour and town of Saldanha and neighbouring Langebaan. Saldanha is seen as the industrial heart of the West Coast, while Vredenburg, to the north, is the commercial centre of the area. Most enquiries are for homes in the R500 000 to R1 million range,says Wynne-Cole. “There is a slow influx of buyers from the central/northern provinces. Planned industrial development, focused on the steel, gas and offshore industries, should increase interest in Saldanha residential and industrial properties.

At present there is growing demand for rental properties, of which there is a shortage.” The resort village of Langebaan is enjoying considerable development. The Shark Bay project, for example, will offer uninterrupted lagoon views from most of the 69 erven. Pricing has not yet been announced. Another residential development on the cards is Meeuklip. Situated between Saldanha and Vredenburg, the small seaside hamlet of Jacobsbaai is viewed as one of the area’s most exclusive beachfront resorts. Here house prices vary between R1.6 million and R6 million.

For those seeking miles of golden beaches, whale and dolphin watching, a round of golf, Stephanie
Wynne-Cole says the area around Britannia Bay, Shelley Point and St Helena Bay is the place to be.
In spite of this, demand for second/holiday homes remains low. However, she adds, “there is a huge
amount of building going on; owners who bought from us as long as eight years ago are now going
ahead with their plans.

“The Golden Mile beachfront is almost full with few remaining plots. We have one 1 200 m²
plot priced at R1,9 million – which is a very low price. Behind the beachfront the On Golden Mile development offers trendy “fishermen’s cottages” which sell for R975 000. They consist of open-plan
lounge, dining/kitchen area, 2 bedrooms and a huge loft area. A roof deck can provide skyline
sea views.”

Wynne-Cole adds that as a result of the slow market, there are many genuine bargains to be found – even beachfront houses from as low as R3 million.

Source: Pam Golding Properties Intellectual Property Magazine

© Property Wheel

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