Bantry Bay’s share of Lightstone Property data company’s 10 most expensive streets in South Africa has risen from one in 2014 to three in 2015, which is perfectly understandable if one looks at the rate of development and return on investment (ROI) the suburb offers.
That’s the word from Lew Geffen Sotheby’s International Realty Area Specialist, Fran Segal, who says: “When one measures the percentage of ROI, it’s easy to see why this sought-after suburb now features so prominently”.
“Since the beginning of 2010 a total of 124 houses were sold to the combined value of R1.615 billion and 314 apartment sales fetched R1.622 billion with total sales for this period realising a hefty combined sales value of R3.237 billion”.
“Measured during 2015, the average %ROI for houses in Bantry Bay was a nominal 16% per annum over eight years, which is an excellent return by any standard”.
“Five houses were sold in this exclusive enclave last year, with their individual %ROI varying between a solid 11% and a phenomenal 22%.”
In Lightstone’s 2014 report published in July last year, only De Wet Road made the cut into the top 10, but this year it was joined by Arcadia and Ravine roads which placed seventh at R22.25 million, ninth at R20.975m and tenth at R20.675m respectively.
Lightstone determines the highest valued roads selecting those with the highest median Rand value rather than the mean value, as it eliminates extreme values which can influence the mean of a street. This therefore gives a good representation of the value of a street as a whole.
To calculate the value of the streets, Lightstone uses a valuation model based on repeat sales and comparable sales which takes inflation indices and applies them to a property’s previous sale price to bring the historic purchase price to current value.
Lara Kaplan, partner Area Specialist for Lew Geffen Sotheby’s International Realty says: “For many years Bantry Bay was overshadowed by Clifton, and more recently by Fresnaye, in terms of market performance, but this has changed dramatically over the past two to three years”.
“Deeds office figures from the beginning of January last year to date reveal that, alongside Bakoven, Bantry Bay achieved the highest average Rand values for houses above R20m on the Atlantic Seaboard during this period with six houses selling at an average price of R27.4m whilst eight houses in Bakoven sold for an average of R27.8m”.
“However, two unregistered sales in Bantry Bay of R48m and R34m during December and February will push the suburb into pole position with the average price increasing to around R30m.”
During the same period, three house sales in Fresnaye achieved an average sale price of of R26.6m, followed by Camps Bay and Clifton at R23.7m (5 sales) and R21.5m (2 sales) respectively.
Segal says: “According to Lightstone, the highest Rand values achieved for house sales during 2015 were in Victoria Road at R35m, De Wet Road and Arcadia Road both at R29m and Ravine Road at R26.5m”.
“They have also determined that only 21% (307 units) of the properties in Bantry Bay are single title houses compared to 1178 sectional title units. Most of the ultra-luxury apartment blocks situated on the seaside of Victoria Road with panoramic views of the ocean.”
Lew Geffen Sotheby’s International Realty Atlantic Seaboard and City Bowl CEO, Brendan Miller says: “Deeds Office records show that Bantry Bay has increasingly dominated this market in the blue chip segment of the Atlantic Seaboard since 2010 with a 30% market share and 314 apartment sales to date achieving a combined value of R1.6 billion”.
“It’s closely followed by Clifton where 143 sales realised R1.3 billion and Camps Bay at 222 sales fetching R1.045 bullion during the same period.”
Upmarket apartments in Bantry Bay have proven to be an excellent investment and, measured in 2015 they out-performed houses with a nominal 18% ROI per annum over eight years.
According to Miller, the suburb’s exponential market growth in recent years is especially evident when measured over the last six years.
“The Bantry Bay apartment market performed brilliantly during this period with the highest average nominal %ROI of 21%, followed by Camps Bay with 16%.”
Lew Geffen, Chairman of Lew Geffen Sotheby’s International Realty says: “With entry level prices now starting at around R10m, buyers looking for value won’t find it in low prices but rather in the return on investment, especially if they are lucky enough to buy one of the original houses”.
“This is where the true value lies for savvy investors as a clever rebuild or revamp can bump up the value exponentially, realising hefty returns in a short time.”
However, such gems don’t often come onto the market considering that 55% of home owners in Bantry Bay have owned their properties for 11 years or longer and 37% of the owners are pensioners.
Even though the market has stabilised in recent months due to the political turmoil and low Rand, Geffen doesn’t foresee the suburb’s market strength waning any time soon.
“Overall, the Atlantic Seaboard is very much at odds with the rest of South Africa in that the market is far less dependent on interest rate fluctuations and is regarded as one of the most stable residential markets in Cape Town”.
“Banty Bay’s prime wind-free position against the mountainside, spectacular views and its proximity to myriad top class amenities will cushion this exclusive market even further.”