Buy-to-let investors looking for tips on areas where they can still buy at very low prices but with a potential for increases in the coming year or two, should, says Bill Rawson, Chairman of the Rawson Property Group, now be investigating the opportunities in the Cape’s country and coastal villages, especially those within reach of Cape Town.
“Over the last year”, said Rawson, “previously only the very inexpensive homes in Strand saw big value rises but now we are seeing freehold prices in the R800,000 to R1,5 million bracket rise by 12% and in the process outperforming the local sectional title units by a huge margin. What is more, it appears that this increase is likely to continue — and it does seem possible that the many luxury units here, priced anything from R1,5 million to R6 million, will start finding buyers by the end of this year. This is certainly a market that property investors should be watching.”
A similar scenario, Rawson believes, is unfolding at Betty’s Bay and Pringle Bay. Here prices, he said, have remained very low since 2008, the majority still being in the region of R800,000 to R1,5 million – but in the last twelve months the Deeds Office has recorded 21 sales in the R1,5 to R3 million bracket and this figure is apparently on the increase.
“Almost none of these prices represent a price upturn – they are still being offered at big discounts – but the improved volumes here suggest that this situation is due for a change.”
In Hermanus, said Rawson, the local Rawson franchisee Peter Greyling reports that below R1 million demand far exceeds supply. However, above that price level some good stock is still sitting on the market, despite being discounted by 30% since 2008, while in other cases sellers have either withdrawn from the market or are staying there with impossibly unrealistic prices.
“Looking at the overall situation in Hermanus”, said Rawson, “I agree with Greyling in that investors with resources should now be taking the gap here and buying because analysts are telling us that next summer Hermanus’ worldwide reputation will once again be pulling in both upcountry and international buyers.”
At Langebaan, said Rawson, it is also now accepted that the falling off of prices, which was possibly more drastic here than in most other areas, is now over, and the Rawson franchisee here expects a 20% rise in sales this year. This, it is said, will be boosted by the steady influx of contractors coming to work on the new Saldanha Bay Industrial Zone. Right now, however, the area can still provide a well-built, three bedroom home on a 1000 m2 plot for as little as R1,3 million. A similar home in the southern suburbs of Cape Town will probably cost about R3 million.
In the Shelley Point/Paternoster area, as the local agent has recently pointed out in a press statement, bargain sales are still possible any day of the week. At the moment, for example, this franchise has a two-bedroom freestanding townhouse available at Shelley Point for R870,000, and a freestanding two-bedroom home at Paternoster for R1,4 million. Homes of this kind only a few years ago, said Rawson, were selling at R1,5 million and R2,5 million.
Moving inland, said Rawson, is it also now clear that Boland and Overberg towns such as Malmesbury, Bredasdorp, Robertson, Montagu and Wellington, are still able to offer buyers exceptionally good prices on homes.