The property market in the Western Cape has clearly entered a positive growth phase, according to Laurie Wener, MD for Pam Golding Properties Western Cape’s Cape Town metropolitan area. “The signs of recovery which began emerging some two years ago have now become firmly entrenched and the property market in this region has embarked on an upward cycle,” she says.
“Underpinned by Cape Town’s universal appeal, globally renowned coastline and cosmopolitan ambience, there are a number of positive indicators which underline the exponentially increasing activity in the residential property market.
“While we have experienced an uptick in movement across all price sectors, there has been a substantial increase in the lower to middle market price ranges from around R600 000 to R3.5 million, as well as renewed interest up to R8 million, as sentiment improved and mortgage-dependent buyers returned to the market. This activity was particularly evident in the apartment market on the Atlantic Seaboard and City Bowl, and in the more affordable housing market along the Western Seaboard.
“Furthermore, after an extended period of muted activity, the developments market is experiencing a resurgence both in terms of concluded sales and the number of new projects brought to market. Residential developments such as Legacy and The Odyssey in Green Point as well as Belvedere Court in Claremont sold quickly, demonstrating the demand for modern new apartments offering a secure and convenient lifestyle. The bulk of prices in these developments ranged from approximately R1.2 million to around R5 million,” says Wener.
She says buyers are demonstrating, time and again, their willingness to pay a premium for this lifestyle, particularly in established areas such as the Atlantic Seaboard and Southern Suburbs. The Amalfi development on Mouille Point beachfront is nearing completion, with sales of well over R100 million to date and with a strong appetite for re-sales even prior to completion. In a similar vein, the new Belvedere Court development in Claremont sold out within just two weeks of launch.
“This is evidence of the fact that buyers are again prepared to commit to off-plan purchases either as a primary residence or for investment purposes in the buy-to-let market. A central location offering easy access, good security and a convenient lock-up-and-go lifestyle are integral to being assured of demand for these developments.
“The high demand for convenient, urban living is further illustrated by the huge demand for sectional title apartments, particularly in the Central City, Atlantic Seaboard and Southern Suburbs areas, from a range of buyers including professionals working in the city, investors seeking to capitalise on a strong rental demand and strong signs of renewed capital growth, and parents buying to provide accommodation for their student children,” says Wener.
She says these areas offer secure, value-for-money accommodation at a relatively low cost, coupled with low maintenance, excellent rental potential and capital growth. The entire Atlantic Seaboard and City Bowl area has seen a rush on sectional title properties over the past year, limited only by availability of stock. Purchasers span the local, national and international market, while in many instances prices being achieved surpass expectations in terms of comparative market value.
“Another area experiencing high demand for sectional title properties is the Southern Suburbs, a trend driven in part by the high demand for student accommodation,” says Wener. “This market spans everything from basic entry-level properties for new-arrival students, to larger properties to be shared by final year and post-graduate students. Sound rental returns in the region of four percent to 10 percent are being seen on quality two-bedroomed apartments, particularly those located on or close to the Jammie Shuttle bus route which services the University of Cape Town.”
Wener says that the rental market in the Western Cape metro area continues to perform exceptionally well, with demand outstripping supply in many areas, especially those mentioned above, and substantially boosting rental prices in certain areas. A good quality, modern, two-bedroomed apartment in central Claremont can currently easily fetch over R10 000 per month, surpass R15 000 per month in the City Bowl and Sea Point and range up to R40 000 and upwards in highly sought after areas such as Bantry Bay, Clifton and the V&A Waterfront.
The demand for upmarket rental accommodation continues unabated with high end rentals achieved by Pam Golding Properties (PGP) in excess of R50 000 concluded for homes or apartments in Llandudno, Stonehurst Estate in Tokai, Fresnaye and the V&A Waterfront, and up to R78 750 per month for a houses in Bantry Bay, Camps Bay and Bishopscourt, with lease periods from one to three years.
In the Western Cape region as a whole – which also includes the Boland and Overberg – Pam Golding Properties has made considerable inroads into the market, having achieved total turnover of R5.3 billion for the financial year ended February 2014, which represents a marked increase of 21 percent over the previous financial year.
In the Cape Town metro, top performing areas include the sought after Atlantic Seaboard, City Bowl, Southern Suburbs and South Peninsula, which accounted for a high percentage of sales. Top prices achieved by PGP agents in these areas include houses and apartments sold for in excess of R20 million. The Atlantic Seaboard team of agents concluded 13 sales above R20 million, ranging to a top price of R100.5 million, while Southern Suburbs reported 13 sales in the price bracket from R10 million to R26 million.
Wener says also noteworthy is that PGP’s Western Seaboard area principal Emarie Campbell reported a 70 percent increase in turnover year on year, backed by an energized team of agents capitalising on the more favourable trading conditions and significantly increasing market share.
Concludes Wener: “International buyers are once again active in the region, including those from other African countries, the United Kingdom, Scandinavia, all over Europe and some from the USA. These have been mainly cash buyers motivated by the unmatched lifestyle on offer in Cape Town, coupled with the favourable exchange rate.
“These extremely positive results augur well for continued market recovery during the year ahead. In addition to renewed activity in the mortgage-dependent market – particularly in the middle market price band from R2.5 million to R8 million, cash buyers remain active and are expected to further increase, thereby contributing to the ongoing overall growth of the residential property market,” she says.
For further information contact Pam Golding Properties on 021 6734200 or email laurie.wener@pamgolding.co.za.
**All prices quoted are actual selling prices and all sales mentioned were concluded by Pam Golding Properties, unless otherwise specified.
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