Although in December the influx of upcountry visitors to Muizenberg was not as marked as it has been in previous years and the number of buyers was not as high as anticipated, one aspect of the property market, buy-to-let, continues to flourish and grow. This is the view of Errol King, franchisee for the Rawson Property Group’s Muizenberg franchise.
This franchise now manages over 160 properties in the area and, King believes, if they could find the stock they could easily rent another 75 or more units because demand for rental property continues to grow.
“Any home put up for rent in the Greater Muizenberg area flies out of the door within a week or two of being listed,” says King. “This, of course, means that rents continue to rise – at close to 10% per annum – and buy-to-let investors are once again very much in evidence.”
Sectional title rents in Muizenberg, says King, can now be anything from R3,500 to R10,500 per month, but the really big demand is for units in the R3,500 to R4,500 range. Whatever rents are charged, he says, they still tend to be excellent value for money, being at least 30% lower than would be charged for similar units further up the suburban line.
In the freehold house market, rents can be from R5,000 to R12,000 per month. Even small, old but characterful homes in the historic centre of Muizenberg, known as “The Village”, can now get R7,500 per month in rent, even though they have neither off-street parking, a garden or modern finishes.
“30 to 40 years ago,” said King, “the only company to do background checks when renting property was Dunn and Bradstreet, the market was not as active as it is now and there were relatively few defaulters. Today, most institutions take non payers or late payers more seriously and we have many different methods of choosing a tenant that are designed to eliminate poor payers. Unfortunately people do lose their jobs, and when this happens the landlord can suffer a loss of income, but this is very rare.”
“Only around Christmas time do we find that tenants may be late in paying – but then we chase them up very swiftly,” said King.
On home prices, said King, the big banks are quoting capital growth year-on-year of 7 to 9%.
“We are now seeing certain properties achieving prices reached during the previous property boom, which is very encouraging for investors as they are now getting real capital growth as well as a good return on their investment.”
“It is interesting to note,” he adds, “that a two bedroom apartment on the market in 2006 for R650,000 and put up for resale in 2009 could then achieve a price of only R450,000. Today it would almost certainly achieve a price on the same level as in 2006. As in many False Bay suburbs, home prices here are once again beginning to reflect a really positive outlook among buyers and this is in part due to the number of young buyers being far higher than it used to be.”
The charm of Muizenberg, says King, is that it retains a village seaside atmosphere while still being close to all the important facilities and within commuting distance of Cape Town businesses.
“Many people buying in the area are able to live without a second car as it is serviced by three railway stations: Lakeside, False Bay and Muizenberg, making commuting to town or the suburbs very easy indeed.”