The sectional title property market in the Cape Town suburb of Rondebosch and its surrounding areas (Rosebank, Newlands, Observatory, Claremont and Kenilworth) have proved to be one of the best performers in the entire South African property sector, says John Birkett of the Rawson Property Group.
Birkett has specialised in this market since 1999 and for most of his career has been among the top performers in the Rawson Property Group. In November 2012, he opened the Rawson Rentals Metro Classic office serving the same market.
A severe shortage of stock halfway through 2013 did, says Birkett, dampen the market for a time, but since October 2013 the sales tempo has once again picked up noticeably. He and Steve de Villiers, his selling partner, sold 21 apartments in a price range of R650,000 to R2,5 million in the last three months of 2013 and this year a similar rate of sales is being achieved. Typically, he says, an available unit will be snapped up within two to three months of coming onto the market.
Rondebosch, says Birkett, has been the focus of the strongest demand and old units, some dating back to the mid-1900s, have proved almost as popular as the new ones, many of which have recently been developed by Rawson Developers
The strongest demand, he says, has been for units in the The Rondebosch, Rondebosch Oaks, River’s Edge, River Song, Albion Place, Edingight, Devonshire Hill, Rusdon Park and Salwood Court.
The buyers here, says Birkett, are mostly the parents of students (or in some cases the students themselves) studying at UCT or buy-to-let investors capitalising on the student market.
They are attracted by the convenient position of these apartments in relation to UCT and, perhaps more importantly, by two further factors: high capital appreciation rates (at The Rondebosch, completed only 13 months ago, a two bedroom unit that sold originally for R1,6 million was recently resold for R2,5 million) and by very satisfactory rentals.
Bachelor flats in the area are now rent at anything from R4,900 to R8,000 per month, one bedroom units at R6,500 to R9,000, two bedroom units from R8,000 to R13,000 and three bedroom units from R9,000 to R15,000.
“The demand is always strongest close to the opening of the new academic year,” says Birkett, “but no property stays empty even if it comes onto the market later in the year. Rawson Rentals Metro Classic has signed 175 leases since we opened our doors in 2012 and we see this success rate continuing.”
To succeed in this business, adds Birkett, an agent must have in-depth, well researched knowledge of the market and he must be trained to achieve the best possible price for his client. He must also, however, ensure that the landlord is offering a quality product in good condition. The agent must always be prepared to “go beyond” the normal duties expected of him.
“If these basic rules are adhered to,” says Birkett, “it is possible that the client and agent will have longstanding relationships. We have some clients who have not only given us their rental portfolios but have bought as many as ten units through us.”
Rawson Rentals Metro Classic operates from The Rondebosch itself and the continual letting activity, which Birkett predicts will eventually overtake the sales side, leads to on-going new sales mandates. Prices, he forecasts, will rise steadily for the simple reason that UCT, which receives some 20,000 applications for accommodation each year, can only provide for 6,500 students on campus. The remainder of the students have to fend for themselves and find accommodation elsewhere.
His office, says Birkett, is fielding more than ten enquiries for rentals each day and almost an equal amount of enquiries for urgent buyers.
“We now need more bachelor, one, two and three bedroom flats as well as houses with multiple rooms,” says Birkett. “Stock is in very short supply at the moment.”