Areas and Places

Harfield Village and Kenilworth; complementary neighbourhoods

While investment appetite for trendy, picturesque Harfield Village has not waned this year, a slow-down in the number of sales indicates buyers are looking at the market more carefully and investigating whether they might derive more value in surrounding suburbs.

Comprising 80% single title properties and renowned for its quaint historic cottages, quiet leafy streets and vibrant business hub, this popular Southern Suburbs enclave has enjoyed a buoyant market over the past six years, with the average sale price of houses increasing steadily since 2010.

Cecile Leck, Area Specialist in Harfield Village and Lower Kenilworth for Lew Geffen Sotheby’s International Realty, says: “The market recovered very quickly from the 2008 crash and by 2010 the average house price was back to its previous high of R1.4 million”.

“Property values continued on their upward trajectory and by 2013 the average house price had risen to R1.7m, jumping to R2.3m in 2015 and, despite marginally lower sales this year due to the economic downturn, the average house price at the end of the second quarter of 2016 was R2.64m.”

Citing Lightstone data, Leck says: “Although property values have remained stable, when one compares the sales volume of the past 12 months to the number sales between April and June this year, the decline is discernible”.

“Between July 2015 and June 2016, there were 42 freehold properties sold with two being at the lower end of the market at an average sale price of R1.3m, 35 in the mid-market R1.5m to R3m price band, while five sold for more than R3m”.

“However, during the past three months only nine single title homes were sold, eight of which were in the middle market and one in the upper R3m plus segment.”

The same pattern can be seen in the sectional title market with nine sales in the preceding year but only one sale during the past three months, although Leck says that at the lower end of the market, homes priced below R1.5m are still selling well.

But, despite the dip in sales the suburb has fared better than many other areas which also saw a corresponding decline in property values, and partner Area Specialist Dave Burger believes that one of the main reasons for this is the suburb’s unique appeal factors, its sense of community and village atmosphere.

“Residents love the fact that they can just stroll down the road to meet friends for coffee or enjoy a meal at one of several great restaurants and it’s not surprising that Lightstone data reveals that almost 50% of the current home owners have lived in their properties for 11 years or longer.”

“However, young investors and first time buyers are increasingly attracted by the vibrant atmosphere and the fact that all the essential amenities are right on their doorstep, while everything else they may need is just a five minute drive away in neighbouring Claremont.”

Burger says that although just over half of existing owners are aged between 36 and 64, almost 40% of those who bought in Harfield Village during the past year were aged 35 or younger.

But, with entry level prices starting at around R1.4m for a rare two bedroom apartment and R2.3 for a townhouse or two bedroom cottage, many first time buyers can’t afford to buy in the Village, especially now that banks are clamping down on lending and many are tightening deposit criteria.

Lew Geffen, Chairman of Lew Geffen Sotheby’s International Realty says that these investors are now looking to adjacent Kenilworth where they can enter the market for under R1m and still enjoy easy access to the amenities and trendy social node in Harfield Village.

“In Kenilworth more than 60% of the homes are sectional title, with an entry level prices of around R900 000 and an average sale price of R1.2m.”

Sales volumes in Kenilworth have also taken a dip in recent months, although the lower end of the market remains active.

“A total of 362 apartments sold between July 2015 and June this year, while only 62 were sold in the second quarter of 2016, however in the entry level price band of R400 000 to R800 000, there is little disparity with 10 sectional title sales in this segment in the last three months”.

“The decline in sales is more obvious in the middle and upper markets. In the preceding 12 months; there were 186 sales in the R800 000 to R1.5m bracket, 113 sales in the R1.5m to R3m price band and 14 apartments sold for more than R3m”.

“But during the past three months, only 29 properties sold for between R800 000 and R1.5m there were 20 sales in the R1.5m to R3m price band while no apartments priced higher than R3m were sold.”

Geffen adds that the same pattern can be seen in the house market where the lower end is still very active with well-priced homes still very much in demand.

However, Leck and Burger remain upbeat as both suburbs offer myriad appealing drawcards for buyers. Not only are they near to several good schools, but Cavendish Square is just around the corner along with Palmyra Junction, Kenilworth Centre, Newlands Cricket and Rugby stadiums and a multitude of excellent restaurants.