The two factors that contribute most to the ever climbing prices of property in Century City firstly include the shortage of available land – limiting the expansion of the suburb – and secondly the ideal location it affords its residents.
So says Helga Clemo, MD for Seeff Century City, who has worked in the suburb for 11 years. Century City has experienced a 16% growth in freehold property prices and up to almost 16% growth in some sectional title complex prices in the past year.
“Besides the fact that Century City is centrally located to all major areas without the overcrowding of the CBD, has direct access to the N1 highway and is just 15 minutes away from the city centre, Cape Town International Airport and multiple popular beach locations, there will also come a point in the near future when no new development would be possible anymore and this will lead to a decrease in stock, making property even more sought after”.
The suburb also offers amenities on its doorstep, these include Canal Walk Shopping Centre, Intaka Island Nature Reserve, kilometres of canals for various water sports as well as Central Park which hosts events such as the Day Market, Night Market, Full Moon Hike, Touch-Rugby and has also played venue to the Galileo Open Air Cinema.
Clemo continues that while Century City is only a 250 hectare suburb, more than half of the land is occupied by canals, nature reserves and commercial properties. The remaining land boasts a whopping 2958 residential properties of which 77.2% are made up of sectional schemes and the remaining percentage of freehold.
“Recently completed developments such as Mayfair Gardens, Manhattan Quarter and Palme D’or have added another 249 properties to this mix and further developments set for completion in the next year include Water’s Edge (comprising 144 apartments on the canal with views of Intaka Island), Palm Brook (comprising 52 apartments in the latest phase of the Oasis Luxury Retirement Resort) and Axis that will offer 83 luxury apartments with marvelous views”.
Clemo continues that Century City has always been a bubble-like market place and an investor’s playground. The decrease in available stock and the constant demand to live here has resulted in a continuous climb in property value.
“In 2015, 324 sectional title units sold at a sales value of R766 500 000 and 24 freehold units sold at a sales value of R69 915 000. 93% of the sales for that year were sectional title at an average value per unit of R2 365 740. The average freehold fetched R2 913 125, but this is no surprise as these properties have a higher entry level market value”.
In 2016, 168 sectional title units sold at a sales value of R395 000 000 and 27 freehold units sold at a sales value of R91 280 000. The sectional title sales still greatly outweighed the freehold sales in unit value, but the average sales price for apartments has remained roughly the same at R2 351 190. Freehold values increased to an average of R3 380 740, which is a 16% boost in just a year.
Although the average sales value of sectional title has seen no growth, investors are still receiving high capital gains as complex-specific growth has been high. Some complex averages include Villa Italia that has grown from R1 919 166 in 2015 to R2 095 238 in 2016 (9.17% growth), Knightsbridge that has grown from R2 148 055 in 2015 to R2 468 571 in 2016 (14.92% growth), Bougain Villas that has grown from R1 647 857 in 2015 to R1 878 636 in 2016 (14% growth) and The Island Club that has grown from R2 357 300 in 2015 to R2 733 925 in 2016 (15.98% growth).”
Clemo adds another strong indicator of the investor’s market in Century City is that 63% of sellers in 2016 owned their property for less than five years, indicating that buyers re-sold their properties for a quick profit. Century City also caters to a big pool of buyers as 2016 buyers are relatively equally spread amongst all age groups.
She concludes that high rental values are also a key point to investors here. Upmarket property coupled with the demand to live in Century City has pushed the rental values higher than in neighbouring suburbs. A very large portion of tenants in Century City are foreigners who are in South Africa for business and corporate tenants who need accommodation for their employees.
“There is a large workforce in Century City needing accommodation. Letting stock is plentiful here as more than half of the properties are investor-owned, due to the high rental returns”.