Areas and Places

Demand for Cape Town CBD properties as strong as ever

The relatively new Rawson Property Group Cape Town CBD franchise set up by Alisdair Crofton just over a year ago is now selling on average half a dozen homes per month, but, said Crofton, his team could do three times this number if more stock was available.

In the current situation where the market is so heavily slanted in the seller’s favour, said Crofton, there is always a danger of the seller becoming too confident of achieving unrealistically high sale prices. If they do this, he warned, they are likely to be very frustrated indeed.

“In today’s market,” said Crofton recently, “any correctly priced home in the CBD and its fringe area, whether freehold or sectional title, will be sold in seven to 21 days – this we are almost able to guarantee. However if sellers, encouraged by the 20 to 25%% price rises of the last year, now go overboard on their pricing they will, firstly, cost the agent a great deal in money and time (especially on extended advertising) and, secondly, they will turn a one month sales exercise into one that could easily last four to six months.

“It is absolutely crucial to have the price right in the first six weeks of the property being listed. If it is (usually against the agent’s advice) overpriced, the genuine buyers will walk away and ten weeks later the seller will be forced to re-price. By that stage, I can assure you, he will almost certainly have lost 80% of those serious buyers who could have made an offer.”

The vast majority of this franchise’s sellers, said Crofton, do accept a well thought out, professionally prepared valuation.

Crofton said that the Cape Town CBD has lost none of its popularity since he last spoke on this subject approximately half a year ago. In fact, he said, it is even more in demand now than before. Some 30% of his stock are free standing units and these, he said, are especially high priced in Oranjezicht, Higgovale and Tamboerskloof, but lower priced units can be found in Zonnebloem and Vredehoek. The overall price range from the bottom to the top across the board is between R3 million and R10 million, with the bulk of demand being for units priced below R4 million.

In the sectional title sector, which comprises 70% of this Rawson franchise’s stock, the price range is roughly R2 million to R5 million. However, said Crofton, in certain parts of the CBD, parts of Zonnebloem and parts of Bo-Kaap, lower prices can be achieved. One unit recently sold by the franchise in the City Centre had a price tag of only R450,000.

The current prices, said Crofton, show absolutely no sign of easing off and demand continues to outstrip supply, making this area particularly popular with buy-to-let investors. Foreign buyers, he said, have also been coming back this year and in the coming summer season are likely to be far more evident than they have been for some time.