Fish Hoek House Prices Rising from 6 to 8% per Annum

Cape Peninsula property trend-watchers have, on several occasions, commented on the fact that Fish Hoek’s average home price is around R1,250,000 while its neighboring precincts, Clovelly and Simonstown, have an average price of around R2,000,000. Some commentators predict that Fish Hoek’s home prices are therefore bound to rise in the near future.

The reasons they give for this are that, apart from the area’s glorious mountains and magnificent beach, it has excellent well-established schools and retail centres and will soon see the full benefit of the re-opening of the Kalk Bay Main Road. Commentators are also saying that more and more people are now opting for the one hour train commute to the city, finding it much less stressful than driving.

Leon Bosman, co-franchisee for Rawson Properties in Fish Hoek and Simonstown, has recently said that there are now signs that this catch up is already taking place.

Bosman said, “Our figures, which are almost identical to those of the latest Lightstone survey, show that prices in Fish Hoek are rising at 6% to 8% per annum. In addition to this, throughout the area, but especially in “the avenues” precinct, continuous renovations and upgrades have been evident for a long time. There are now relatively few houses in “the avenues” which have not been improved in some way over the last three to four years.”

Bosman continued, “A third reason for confidence in the area’s ability to transform itself is that approximately 30% of today’s buyers are between the ages of 20 to 30 and are very definitely members of the upwardly mobile, future leaders set.”

These young people, said Bosman, recognize that at today’s prices Fish Hoek offers ‘really great value’. “They and others,” he said, “have done their homework before buying here and they clearly see that Fish Hoek prices are 30 to 40% lower than prices of very similar homes up the line, for example in Claremont, Rosebank or Bergvliet.

“Another factor which adds greatly to the value of Fish Hoek homes,” said Bosman, “is that perhaps 30% have been reconfigured in one way or another to make them suitable for dual living. There is either a cottage or flat on the grounds, or the property is divided so that two families can each have a measure of privacy and in many cases their own entrances.”

When asked just how affordable Fish Hoek’s prices actually are, Bosman said, although Fish Hoek can offer homes of up to R5 million and higher in value, most of the freehold buying action is focused on the R800,000 to R1.5 million price bracket, while in sectional title, where the prices are perhaps 15% lower, demand is even stronger. In these brackets any fairly priced unit is snapped up within two to four weeks.

In Simonstown prices tend to be above those of Fish Hoek. According to Bosman, the town’s 150 year history as a British naval base and the ‘very English’ look of its main street, restaurants and shops set it apart and give it a unique appeal. Europeans who spend several months in Cape Town every year find these factors to be very attractive.

At the time this article was written, the Rawson Properties’ agents for the Simonstown office were about to conclude two sales to British buyers at prices of R3.9 million and R2.8 million. Bosman is confident that further sales to foreigners will come through over the next few months.

On the rental front, Rawson Properties’ Fish Hoek team has only one problem: trying to find sufficient stock. Bosman said that almost any freehold unit renting at between R6,000 to R10,000 will probably find a taker within a week. There is also sufficient demand for properties with rental prices of R15,000 to R20,000 per month. In sectional title units, the demand is equally good but the rentals here tend to be, on average, 20% lower than those of freehold houses.

Bosman explained that rentals in Fish Hoek are divided between those on short term leases (the holiday market) and those on long leases. Short term rentals, which are particularly popular during December and January, average out at R250 per night per person (which, for the record, is not expensive by Cape standards). After the holiday period, many landlords convert their leases from short to long term.

For the reasons explained above, Rawson Properties Fish Hoek expect to sell three to five houses per month this year. According to Bosman they have laid an excellent foundation and have made good contacts, mostly through giving free valuations on over 400 homes in the area.

“Although it is far too early to talk about exiting from the recession,” said Bosman “the simple truth is that the worst is over and from now on we can look forward with a great deal of confidence in steady price rises.”

© Property Wheel

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