Everything that has been said this year by estate agents about rapid price rises, high demand and shortage of stock in the residential property market of Cape Town’s more central Southern Suburbs applies in an even more pronounced way to the housing market in Observatory and its neighbouring suburbs.
This was said recently by Craig Gilfillan, the Rawson Property Group’s franchisee for this territory.
Prices of homes in Observatory, whether sectional title or freehold, said Gilfillan, have risen by a staggering 12% or more in the last year and housing stock is now in such demand that any accurately priced home will attract several buyers and probably be sold within 48 hours.
All this fulfils a predication that Gilfillan made over a year ago when he said that Obs’ growing reputation as a lively ‘in’ place would make it eminently suitable not just to students but also to upwardly mobile young executives, professionals and academics.
“Obs has the reputation of being a lively, up and coming enclave and one has only to look at the vibrant activity at such well-known restaurants as Panchos, Obs Café and Mango Ginger to realise that this reputation is certainly well deserved. The area is definitely alive, with students comprising 30% of the local residents but the people actually buying rather than renting here now are noticeably wealthier and better qualified than the buyers of a few years ago and they are prepared to spend more on improving their homes.”
Such buyers, said Gilfillan, are attracted to Observatory because it is only a 10 minute drive from the CBD (“Capetonians are increasingly averse to wasting time on commuting”) and it is also very close to UCT, Groote Schuur Hospital and other institutions providing supplementary or tertiary education. The area is also popular with the upwardly mobile set, he said, because it has many solid, spacious Victorian homes, which are exactly what many buyers want today.
“High ceilings, cast-iron fireplaces, wooden floors, sash windows and similar features are now sought after and cherished,” said Hilton Hesse, sales agent in the Observatory sales team.
Today, said Hesse, sectional title units, which are usually ‘new’ (± 7 years old) in comparison to the freehold stock, now sell from R550,000 to R1,2 million. Freehold homes, which comprise 90% of the stock in the area, sell for R900,000 to R3 million, with a few more expensive homes still to be found here.
The same bullish seller-orientated conditions found in the sales market are also found in the rental market, said Gilfillan. This franchise now manages 98 units in all and is finding that rents have recently risen by 15% and are pitched in the R3,500 to R12,000 bracket – with again some of the bigger and more luxurious homes being able to charge even more. Prices are still significantly lower than house prices in Rondebosch, Claremont, Kenilworth and City Bowl.
“The previous price rises were so fast and so big that there has to be a cooling off period,” he said.
Typical properties recently sold by the Rawson Property Group in Observatory are:
1.) A two bedroom Victorian home with many modern features, particularly in the kitchen. The list price was R1,895,000 and the full asking price was achieved.
2.) A double storey 66 m2 two bedroom modern cluster home. Initially listed at R1,125,000, this home sold for R1,100,000.
On the rental side Rawson Observatory have recently signed leases for a two bedroom, one bathroom sectional title ground floor apartment with good views across Observatory towards Devils Peak. The rent here is R5,600 per month. This franchise has also recently signed a lease at R7,000 per month for a three bedroom fifth floor apartment sited in the heart of Observatory on the centrally located Lower Main Road. This unit has an exceptionally large kitchen and central lounge area and has wooden floors throughout.