Demand for residential property in the once-bohemian suburb of Mowbray in Cape Town has risen so sharply that the average time a house remains on the market has now dropped to a mere eight days, with some even selling within a day of release.
Tina Malyon, Freehold Area Specialist for Lew Geffen Sotheby’s International Realty, says: “We simply cannot keep up with the demand at the moment as there is just not enough available stock”.
“Mowbray has become increasingly popular in recent years. Since 2012, particularly, we’ve seen the average time houses spent on the market drop significantly to just 37 days, decreasing further to 19 days in 2014 and this year we often barely have time to market properties before they are sold”.
“The average sale price has also spiked and further analysis of Propstats data reveals that the average house price of R1.55 million in 2012 increased to just shy of R2m in 2014 and by the end of August this year it had jumped to R2.9m.”
According to Lew Geffen, Chairman of Lew Geffen Sotheby’s International Realty, the sectional title market has fared equally well, driven mainly by the growing need for affordable accommodation near the University of Cape Town.
“In 2012, the average price of an apartment was a very accessible R717 33 yet they remained on the market for an average of 44 days”.
“Just two years later, flats in Mowbray were realizing an average sale price of R1.07m and selling within 17 days. The dearth of available stock has been most notable this year with far fewer sales, of which the highest recorded sale price was R1.85m after just 13 days on the market.”
New sectional title developments have sprung up on Main Road, which is the hub of the suburb and the location of bus, taxi and train interchanges.
Malyon believes that while the notable drop in unit sales this year was underpinned by a lack of available stock, it was further fueled by investor caution ahead of the Local Government Elections.
“We are beginning to notice a more relaxed attitude among home owners now that the dust has settled with the Cape’s market buoyancy intact, and there has been a slight increase in evaluation requests as a result of the restored confidence.”
However, a resilient market is a double edged sword in suburbs like Mowbray where key drawcards include accessible pricing in a high value area, a conveniently central location and spiralling demand.
Claude McKirby, Southern Suburbs Co-Principal for Lew Geffen Sotheby’s International Realty says: “Property owners in these suburbs are often reluctant to sell as they recognise the potential value of their investments and Mowbray is no exception”.
“Lightstone data reveals that just over half of all property owners in this eclectic suburb have had their properties for 11 years or longer and, as the average house price in 2005 was around R920 000, many will have seen the value of their properties increase by more than 200 percent.”
Malyon says she has concluded a number of repeat sales for clients this year who saw a profit of up to 100% in just four or five years, with even unrenovated properties yielding very solid returns during this period.
She adds that despite the surge in property values, Mowbray is still an affordable option for young families, especially the older unrenovated homes which they can upgrade as the need arises and the budget allows.
“The majority of the current buyers are families moving from pricier Atlantic Seaboard and City Bowl as they can buy more house for their money within close proximity of several good schools”.
“Most sought-after are three bedroom, two bathroom houses with small gardens which cost the same as apartments in suburbs like Tamboerskloof and Sea Point.”
The suburb has been steadily upgraded in recent years with ongoing greening projects to uplift the area and many trendy shops, cafes and restaurants and moved into Durban Road which has cultivated a vibey café society and foodie destination.