“The average selling prices of properties in various categories in City Bowl areas are showing significant growth,” says Ryan Greeff, Director of Greeff Properties, Christie’s International Real Estates, City Bowl.
Greeff was commenting on Propstats figures comparing the average selling price of apartments in the City Bowl during the six months from September 2015 to present, with the six-month period preceding that. “Overall the average selling price of apartments for all City Bowl areas increased by 15.5% in the six-month period indicated, but certain pockets of the City Bowl showed higher growth than others; The average selling price for apartments in Oranjezicht increased by 17%, closely followed by Tamboerskloof with a growth of 16.2%, De Waterkant at 9.2% and Vredehoek at 7.7%, according to Propstats recorded figures,” says Greeff.
“In Tamboerskloof, the average selling price for double-storey homes rose by 17% in the past six months, followed by Higgovale at 12.6% and Vredehoek at 12.5%,” says Greeff. “These increases reflect the usual summer seasonal peak of interest the City Bowl property industry has become known for,” says Greeff.
“Business has indeed been brisk and demand high over the peak season from November 2015 through February 2016, with Propstats recording a total of 197 units sold in the City Bowl areas,” reports Greeff. “Of these 197 sales, 115 were cash transactions and 82 were financed by bonds.”
Greeff says that foreign buyers continue to show interest in City Bowl properties, but do not account for the majority. “Foreign activity peaked in January and February 2016 when sales of City Bowl properties to foreigners accounted for 15% of total sales revenue, whereas in November and December 2015, property sales to foreigners comprised only 5% of the total sales revenue,” reports Greeff .
Buyers hailed from United Kingdom, United States, Australia, Germany, Italy, France, Spain, Switzerland, United Arab Emirates and Korea.
“As the stats indicate, international, national and local investors are active and are currently snapping up bachelors as well as one and two -bedroom apartments,” explains Greeff. “For this reason we’ve been strategically targeting national and international marketing both on online and print platforms in order to maximise the returns for our sellers,” says Greeff. He adds that developers are still aggressively perusing opportunities such as GR4 sites and existing blocks, but are showing a slightly more caution than the “bullish” sentiment witnessed in 2015.
“Efficient public transport has increased the allure of an already attractive array of offerings in the city of Cape Town,” says Marthinus Botha, Director of Greeff Properties, Christie’s International Real Estates, City Bowl. “Apart from great views, restaurants, clubs, boutiques, markets, heritage buildings and the unique buzz of life in the Mother City, more and more people are being drawn to the area due to the sheer convenience of the lifestyle. City dwellers now enjoy a radically improved transport offering with the introduction of the MyCiti bus service,” says Botha, adding that fuel savings and avoiding the stress of traffic jams are huge draw cards.
Greeff’s figures and sales data indicate that demand for City Bowl properties is increasing and that there is currently a shortage of stock. “Properties on the My Citi bus routes are getting the lion’s share of attention,” says Botha. “Those interested include a growing number of people who live in the city from Monday to Friday, using public transport to commute to and from work – and on the weekend, they go home to places like Blaauwberg or Simonstown. The city is also a popular choice for out-of-towners working in Cape Town and flying back to families in Johannesburg or other cities on weekends; many make use of the MyCiti airport shuttle, leaving their cars safely parked in secure apartment block garages and saving thousands of Rands in airport parking fees and private shuttle rates,” adds Botha.
When asked about the effect of increased interest rates on the property Market, Greeff says: “The price point sweet spots across all market segments in the City Bowl this year seem to be very much the same as last year, but with increased interest rates we are finding that bonded transactions are a bit more challenging with banks becoming stricter following the increased interest rates and rand volatility we’ve recently seen, but to minimise this risk for the seller, bond originators perform a thorough prequalification on purchasers before any offers are put forward to clients,” says Greeff.
“We usually start to see a spike in the rental market as more people get pushed out of the market. This makes the yields more attractive particularly in the sectional title space,” adds Greeff. He is of the opinion that property is currently offering a more stable return than the more volatile stock market.
“There is currently a healthy demand for rentals in the City Bowl, and investment properties here can yield good returns,”says Greeff Rentals Principal, Glenda Taylor.
“A tiny bachelor flat with one parking bay in a modest block might fetch R6 000 to R7000 per month, while a one-bedroom in a modern block with security and parking is currently around R8 000 to R10 000 per month. Two-bedroom apartments in Gardens and the city Centre can fetch anything from R12 000 to R20 000 per month depending on facilities, views and location – rentals vary hugely from one street to another,”says Taylor, adding that accommodation with parking is premium;
“Some people rent out their parking bays for R500 to R1000 per month,” she adds. Houses in Tamboerskloof may draw rentals ranging from R20 000 to R40 000 a month, while those in Higgovale attract rentals from R30 000 to R60 000.
“These are ball park figures though and rentals vary massively in the City Bowl, though they do tend to be higher in apartments and properties closer to the mountain,” adds Taylor.
She says that would-be tenants looking in the City Bowl often place a premium on renovated and decorated spaces, so the more care landlords have taken with properties, the higher the rental that is likely to be achieved, sometimes in spite of the inferior state of the rest of the building, in the case of an apartment.