The City Bowl is emerging as one of the most resilient markets in Cape Town as ongoing commercial development in the CBD and unabated demand for residential property continue to buffer the area from the brunt of the subdued economy and property market slump.
This is according to Brendan Miller, Lew Geffen Sotheby’s International Realty Atlantic Seaboard and City Bowl CEO, who says: “Although there has been a slight dip in sales this year, property values have remained stable, especially in the lower to mid-markets, while the most sought-after pockets have continued to achieve solid growth.”
“One suburb which hasn’t wavered from its upward trajectory is Tamboerskloof where high demand has resulted in a steady year-on-year price increase since 2010 when the average house price was just under R3 million, increasing to R5.6m in 2014 and nudging the R7m mark by the end of 2015.”
Miller says that despite the economic and market downturn, the average sale price in this sought-after suburb has continued to rise steadily.
“An analysis of the sales recorded on Propstats reveals that during the first quarter of 2016 the average house price increased to R8.4m, jumping again to just over R10m by the end of June.”
Tina Katz, Freehold Area Specialist for Lew Geffen Sotheby’s International Realty attributes the suburb’s market strength to several key factors which have seen Tamboerskloof become one of the city’s most sought-after residential destinations.
“Although Tamboerskloof enjoys the same convenient proximity to the CBD as the rest of the City Bowl, its prime position against the slopes of Signal Hill affords residents a more peaceful, suburban lifestyle which is especially appealing to families with children”.
“And unlike areas like Vredehoek and Gardens where smaller houses and semi-detached homes are common, most of the freestanding properties in Tamboerskloof are spacious double storey Victorian houses on sizeable stands, interspersed with ultra-modern designer homes.”
Katz adds that although it is often assumed that freestanding homes dominate the property landscape, they actually only account for 36% of the properties in Tamboerskloof.
“There are therefore often limited in available options available to investors and this scarcity is exacerbated by the fact that owners tend to hang onto their houses for many years, often for the duration of their children’s schooling”.
“They also realize that they will not easily replace the lifestyle and convenience they enjoy in Tamboerskloof.”
According to Lightstone, 53% of all current owners have lived in their properties for 11 years or longer with the majority (71%) aged between 35 and 64.
Mikaela Pace, Sectional Title Area Specialist for Lew Geffen Sotheby’s International Realty, says that the comparative affordability of sectional title properties in Tamboerskloof has ensured that sales volumes in this sector have remained steady.
“During the past three months between May and July this year, 14 apartment sales realised an average sale price of R2.92m, which was up from an average sale price of R2.66m realized during the previous 12 months ending 31 July”.
“During both periods, the mid-market R1.5m to R3m price band was most active with six and 29 sales respectively.”
Pace adds that this market is largely driven by younger first time buyers wanting to get a foot in the City Bowl market.
“Although apartment prices are a little higher in Tamboerskloof, buyers are attracted by the suburb’s excellent position that offers dramatic mountain, and ocean views as well as a measure of protection from the worst of the south-easter wind which often batters suburbs like Vredehoek.”
Underpinning the City Bowl markets buoyancy is the fact that there is no more vacant land for further development.
“The only option open to developers is to acquire adjacent homes with GR4 zoning to build sectional title properties and there is fierce competition between developers as many home owners are reluctant to sell,” says Pace.
Miller concludes that given rampant development in the CBD and the unique and strong appeal factors of the City Bowl, it will not only remain a solid investment but values are likely to be more immune to market fluctuations than most other areas.
“Nestled between iconic Table Mountain and the cosmopolitan CBD as well as being only a short drive from world class beaches and the V&A Waterfront, the City Bowl is still a favourite with foreign buyers”.
“And locals are drawn by the excellent schools and myriad amenities in the area as well as being able to escape the burgeoning traffic congestion during peak hours.”