Anyone looking to buy Cape residential property at affordable prices in a very fast appreciating area should look no further than Bothasig and its surrounding suburbs. This was said recently by Colin Kretschmer, Manager of the Rawson Property Group’s franchise in this precinct. (Marc and Esme Vladislavich are the franchisees.)
Deeds Office figures, says Kretschmer, show that in 2012 the average sales price of a Bothasig freehold home was R979,000 (R447,000 for the few apartments in the area) and the average freehold asking price was R1,020,000, which is more than 10% higher than the average price achieved in 2012. What is particularly significant, he says, is that he can now confidently predict that these price rises will continue at the same pace in 2014.
“The simple truth,” says Kretschmer, “is that demand here is running well ahead of supply and, as we all know, this always leads to steady price increases.”
In 2012 Bothasig had exactly the same number of sales as in 2013, despite the demand – another indication that stock here is very much in short supply.
Homes on the Rawson Property Group’s sales lists have almost always, says Kretschmer, sold within one month or less. The highest price achieved by this franchise in 2013 was R1,580,000 – and that home was sold within nine days.
Rental demand throughout the area is even stronger than that for sales and at the current price levels buy-to-let investors (even those with 100% bonds) often from the outset come close to covering their monthly bond repayments through rentals.
What is it, apart from these affordable prices, that makes Bothasig so sought after?
Staff in the Rawson Property Group franchise say that the suburb’s location, just 15 km from the city centre, its excellent retail centres and sports clubs, its good schools (with many buying here so as to be able to qualify for entry into Edgemead’s primary and secondary schools) and its relatively low crime rate have all helped to raise its image in the public’s mind. This in turn has led to on-going upgrades. Even the original homes of “old” Bothasig erected in the 1960s on the instructions of P W Botha, then Minister of Housing, have in many cases been transformed with brick cladding and other improvements, while in “new” Bothasig, to the northeast of the original suburb centre, the standard of both design and finishes is noticeably higher.
Bothasig’s surrounding suburbs, all of which are served by this franchise, have, says Kretschmer, seen a similar rise in popularity. In Edgemead, one of the original garden cities, prices are 15 to 20% higher than those of Bothasig and the agents here often do not even advertise stock – it sells as soon as it is listed. At Richwood the prices are significantly lower than those of Bothasig (they range from R600,000 to R950,000) and at Summer Greens they are lower still at R550,000 to R750,000. Richwood, incidentally, is witnessing major developments on either side of it and Phoenix is equally affordable.
All these areas, says Kretschmer, are seeing price increases on a similar scale to those of Bothasig. At Richwood a home was recently sold for the astounding price of R1,4 million, way above the average for the area.
Kretschmer adds that special attention should, in his opinion, now be paid by investors to Burgundy Estate, where the Rawson Property Group do regular re-sales. This mega-development, launched some three years ago on the attractive Table Bay facing slopes of the Tygerberg, is made up of 20 sectional title apartment complexes.
Soon after the launch, which brought in a host of developers, the recession hit and some buyers found themselves having to sell at prices below what they had originally paid.
Now, however, prices here are stable and, in fact, rising and Kretschmer says that the long term prospects for this estate are excellent because it has such good facilities – its own chic retail centre, a school, walking and cycling trails, good landscaping and a golf club with a restaurant and bar, both of which are frequented seven days a week by people in the area.
“For the long term investor Burgundy Estate is definitely the place to be,” says Kretschmer.
As indicated, rents in all these suburbs are, as in most affordable areas in South Africa today, running well ahead of previous levels. The Rawson Property Group is renting houses in Bothasig in a range of R4,500 to R9,500 per month (with one or two going above R12,000). At Edgemead R7,000 to R11,000 rents are now standard and in the other suburbs of this area the rental range by-and-large is from R4,500 to R8,000 per month.