Hip and happening millennial buyers have been a breath of fresh air for the Atlantic Seaboard and City Bowl residential belt according to Ms Billy Rautenbach, Sales Director for Seeff’s operations across the area.
Where these neighbourhoods were once dominated by older buyers, predominantly in the fifty-plus age group, there are now at least eight suburbs where millennials comprise upwards of 20% to almost 40% of property buyers, she says. Sea Point and Three Anchor Bay were for example once dominated by retiree buyers. Today, some 20%-30% fall under the 35-year age group.
The City Bowl tops the Seeff Millennial Buyers Barometer, with five neighbourhoods compared to just three on the Atlantic Seaboard. This, says Ms Rautenbach is attributable to the relative affordability compared to the Atlantic Seaboard.
Seeff looked at buyer patterns and price movement in the sectional title sector as this is where millennials tend to invest. Although affordability is key, millennials are also savvy about making their money work for them according to City Bowl agent team, Warren Emett, JP Ricketts and Alan Screen, themselves millennials. They are prepared to pay a premium here given that these areas have exceptional capital appreciation and returns on resale that then enables them to upgrade in the area.
So, where are these hipsters buying? Emett, Ricketts and Screen say that Zonnebloem and Vredehoek top the list at 37% and 36% respectively. Both have shown excellent price growth over the last five years. Zonnebloem prices rose by 71% and now stands at R1.3m while Vredehoek prices almost doubled to R2.3m (from R1.2m).
Also notable, is Oranjezicht at 35% with its price almost doubling to R3.4m (from R1.7m). The CBD only boasts 24% despite an affordable average price of R2.2m, 83% up from R1.2m. De Waterkant boasts 22% despite the higher average of R4m which has risen three-fold from R1.6m.
Three Anchor Bay tops the list of popular millennial suburbs on the Atlantic Seaboard at 31% and, with its average price now at R3.2m, more than double the R1.5m of 2012, they are investing well according to Bryan Ginsburg and Hilary Biccari, sectional title agents for the Atlantic Seaboard. Green Point stands at 20% and an average price of R4.1m, almost three times higher (from R1.5m). Sea Point boasts 18% and an average price of R4.1m, more than double the R1.8m of 2012. The only other two suburbs that register on the barometer, is Fresnaye (13%) and Mouille Point (11%).
According to Seeff’s agents, it is not just price that plays a role in the buying decision, but the lifestyle is a big draw card. They seem to embrace urban living, opting for the lifestyle benefits rather than a large home and garden. They want to be close to trendy restaurants, bars, clubs and fitness hot spots and tend to go out often. On weekends for example, they frequent the winelands, food markets and festivals and coastal hot spots such as Blouberg, Langebaan and Hermanus.
From a rental perspective too, it is generally the younger buyers who are looking in the mid-market areas. That makes apartments in the price range below R20 000 an excellent choice for buy-to-let investment across the areas.
Samuel Seeff, chairman of the Seeff property group says that growth in the property sector as a whole, will come from the rising middle class that is largely dominated by the millennial buyer demographic: “Regardless of whether they are graduate professionals, entrepreneurs or in skilled mid-level jobs, home ownership is likely to continue ranking as a priority”.