Areas and Places

Strong Demand For Residential Property In Sea Point

The many bullish predictions made in late 2012 and early 2013 by several spokesmen for the property sector predicting an increase in demand for Sea Point property have proved to be wholly accurate, says Gary Freeman, sales manager for the Rawson Property Group’s Sea Point franchise, of which Sandy Soller is the franchisee.

“Many agencies in the region have seen a 100% or more rise in sales and we are up from one or two sales per month at the start of last year to five or six per month right now and I am confident this trend will continue throughout this year,” he says.

Inevitably, says Freeman, the greatly increased demand has led to price rises, which, he estimates, have been in the region of 10 to 15% and are set to continue.

Ninety percent of this franchise’s sales, says Freeman, are in the sectional title market (their offices at 182A Main Road, Sea Point are, in fact, entirely surrounded by low and high rise apartment blocks). Today, he says, flats which only two or three years ago were selling at R650,000 to R700,000 are now priced at over R1 million but the strongest demand is in the R1 million to R2 million bracket.

“We are finding that in the popular R1 million to R2 million bracket, correctly priced homes are snapped up within a few days of being listed,” says Freeman.

Surprisingly (to some) almost all of this franchise’s bond applications are now proving successful – in fact in the last few months Freeman can recall only one application that did not succeed and that was due to the applicant’s age (despite his already owning a significant portfolio of property).

This Sea Point franchise has always campaigned for accurate pricing because they find this gives greater credibility in the market and helps ensure that they attract buyers who can genuinely afford the home and are not hoping to negotiate an obviously high price down to unrealistic levels.

“The main problem here is that other agencies will convince a seller that they can get far more for their property. Then, a few weeks later, after no viewings and no offers have been made, they convince the seller that they renegotiate the price.”

As in previous years, a significant number of their buyers are from Gauteng and there has, too, in 2013 been a massive influx of UCT students willing to undertake the commute into and out of Cape Town on the way to UCT daily.

“In the Rawson Property Group’s current portfolio of ± 60 sectional title units,” says Freeman, “it is now possible to get R6,500 per month for a compact 45 m2 bachelor pad and R8,000 to R9,000 per month for a two bedroom unit.”

Short term rentals over the holiday season are also, he says, showing signs of reaching record levels, a fact already picked up by the trend conscious property press. The Rawson Sea Point team were recently able to achieve a rental of R11,600 per day – and furnished units in the same area have been renting at R2,500 or more per day. The owners of an ultra-luxurious home with ten bedrooms (including one in the servants’ quarters) and an array of exotic fixtures and features are asking for R100,000 per day – and this has been achieved over a three month period.

In the year ahead, says Freeman, the big challenge for all estate agencies will be to find sufficient stock. At the start of the holiday season the Rawson Sea Point team had some 60 homes to offer, but they would have liked at least 50 more and have been telecanvassing and soliciting for stock very actively.

“The message we have to put out is that Atlantic Seaboard property has its own unique pricing trends and is very different from almost all other areas in South Africa because a small two bedroom, sea-facing flat here can achieve the same sales price as a four bedroom Sandton home in a landscaped garden on a 2,000 m2 plot. However, what is crystal clear is that prices are continuing to rise, rents are sky rocketing and there can be very few better buy-to-let investment areas in South Africa today than the Atlantic Seaboard, a fact already appreciated by the growing band of investors moving into this area week by week.”

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