The unremitting economic crunch has trickled through to the more resilient exclusive markets like Cape Town’s Camps Bay, where changing buyer appetites have precipitated a notable market shift and sales volumes are down, but property values have shown enormous growth.
Edith Marsh, veteran Area Specialist for Lew Geffen Sotheby’s International Realty says: “We have definitely noticed changes in the market during the past eight months especially, with luxury properties at the top end taking a little longer to sell while we can’t meet demand for entry level homes under R10 million.”
Marsh’s colleague in Camps Bay, Erica de Kock, says that currently the most sought after properties are “fixer-uppers”.
“These homes are sometimes renovated but more often demolished and rebuilt. The problem for prospective buyers is there are comparatively few original houses remaining in Camps Bay”.
“We also field regular enquiries for vacant plots but these are an even rarer commodity, and entry level apartments in older blocks for which many buyers are willing to pay cash are now also bordering on extinct.”
However, one aspect the slump hasn’t affected is the strident growth in property values, with average house prices in the suburb increasing by a whopping 27% between 2015 and 2016, from R12.5m to R15.9m.
This according to Marsh, who says: “This tops the exponential growth Camps Bay enjoyed between 2010 and 2015 when the average house price escalated nominally by 15% year-on-year over six years, from just under R6.5m to R12.5m in 2015, tripling the growth seen between 2005 and 2010″.
“However, in terms of volume, the market peaked in 2014 with a record number of sales since the last property boom almost a decade ago in 2007. At the peak the average house and apartment sale prices spiked from a 2010 low of R6.5m to R9.88m and R5.7m to R6.12m respectively.”
Marsh says that an analysis of Propstats data reveals that apartments fared even better during 2016 with the average sale price leaping by almost 47% in just one year from R6.95m in 2015 to R10.2m last year.
“This surge can largely be attributed to two main factors: the sale of several luxury apartments in recent developments as well as the growing gap between supply and demand in a suburb where sectional title homes only account for 33% of the property landscape.”
Marsh points out that Camps Bay’s market performance in 2016 was considerably better than the average house price inflation across the broader Atlantic Seaboard.
“The average sale price of houses increased by 15.4%, from R12.65m in 2015 to R14.6m in 2016 and the average apartment price of R5.3m in 2015 rose by only 4% to R5.56m in 2016.”
Lew Geffen, Chairman of Lew Geffen Sotheby’s International Realty, says another market shift last year was the change in the time properties spent on the market, especially homes in the entry and middle brackets.
“Between 2014 and 2015, there was very little change in the time it took to sell properties, with houses and apartments remaining on the market for around 155 and 182 days respectively during both years”.
“However, there was a marked difference last year with the average for houses being 130 days on the market and, on average, flats sold within 113 days. Most notable is that, almost without exception, both apartments and houses priced under R10m sold within a month, and some even in a matter of days.”
Geffen adds that during the previous two years it wasn’t uncommon for homes in this price band to remain on the market for six months or longer.
De Kock concludes: “Investors are undoubtedly more cautious at the moment but the Camps Bay market is still very active in terms of interest and queries”.
“During December our office was inundated with requests for evaluations as well as a steady stream of walk-ins, many of whom were international visitors to the city.”