Current media reports regarding the unprecedented demand for sectional title properties in the Upper Claremont, Cape Town, are in no way exaggerated, says Matthew Schrire, the Rawson Property Group’s agent serving this sector through their Claremont franchise. Rawson Claremont is now based in Brooke Street and is owned and run by John Birkett and Steve de Villiers.
Schrire says that of the ± 2,500 residential units in his area, roughly 65% are now sectional title and this percentage will increase over the next two years as more new units are coming off the production line.
Most of the new sectional title units in the Upper Claremont area, says Schrire, have been appreciating at 15 to 16% per annum, with some doing even better.
Schrire says that there are two main classes of sectional title apartments in this precinct.
“In the first category we have the older stock, often built in the 1950s to 1970s era. These units are in every way comfortable apartments, often with quite large floor areas, but most of them lack the chic fittings and finishes of the second category, the new units which have become available in the last 10 to 15 years, with Rawson Developers being one of the main players in this field.”
With new units, says Schrire, the price range for a typical two bedroom apartment today will be anything from R1,9 million to R2,8 million, a price that would have seemed “absolutely unobtainable” only a few years ago.
“The price rises,” he says, “have been exceptional.”
Taking as an example the resold units in Rawson Developers’ The Beaumont, their 175 unit apartment complex, Schrire says that since the launch in early 2012 when buyers were able to buy off plan, single bachelor units, the slowest appreciating stock, have grown in value by 22%, e.g. from R1,020,000 to R1,250,000, while typical two bedroom apartments have seen value rises of ± 50%, e.g. from R1,734,000 to R2,6 million. Even the smallest penthouse suites in The Beaumont, says Schrire, now have a value of R4 million.
Aware of what a good investment sectional title units in Upper Claremont has become, buy-to-let investors are now, says Schrire, averaging 45% of the total buyer list and, he says, most owners are now extremely reluctant to sell because they see clearly how well their assets are performing. This, in turn, means that estate agents like himself have to work hard to find stock and when they do, provided the unit is correctly priced, they will usually sell it within one week.
As a further 200 sectional title units are now coming on stream in Upper Claremont, Schrire says that the best advice he can give buyers is to secure a unit now, even though the price may seem high.
“It is possible,” he says, “that buyer resistance to ongoing price rises will result in these moving slightly slower, but I cannot for one moment see a situation in which significant growth will not continue.”