Densification and development continue to hallmark the residential sales landscape in exclusive Atlantic Seaboard neighbours Bantry Bay and Fresnaye, with demand for property in the GR4 zoned areas and older houses that can be demolished yet to wane in the face of the teetering national economy.
This is according to Lara Kaplan, Area Specialist for Lew Geffen Sotheby’s International Realty, who says rapid sectional title development across all market segments as measured against equivalent “entry-level” to luxury price band properties in the area, is not only changing the suburbs but has been a driving force in the market’s consistent strength in recent years.
“This is especially true of the smaller of the two suburbs, Bantry Bay, which is snugly nestled between mountain and ocean and has no greenfield land left. The only option developers have is to buy old houses and demolish them, which has contributed to the scarcity and rise in values of these properties.”
Lew Geffen, Chairman of Lew Geffen Sotheby’s International Realty, says: “Buyers are lining up for apartments in these sought-after suburbs, especially in what is considered to be the areas’ lower to mid-market segments with entry prices of around R3.5 million to around R8m because these properties still offer comparatively accessible entry into what is undoubtedly an exclusive market”.
“An analysis of Propstats data clearly demonstrates how emerging trends and shifting buyer demands have affected the market, especially in Bantry Bay where the average house price in 2014 was R14,9m with three of the 15 sales that year being plots and nine of the houses sold were older than 15 years”.
“Just two years later the average sale price of houses had risen to just shy of R20m, excluding a single anomalous R290m sale during the period that significantly skews the true statistical values for the area”.
“And, of the nine freehold sales in 2016, none were vacant land and only six houses were built more than 15 years ago”.
“This translates to an increase in value of around 11% per annum over three years, which is a great return on investment in anyone’s book.”
Fran Segal, fellow- Area Specialist in Bantry Bay and Fresnaye for Lew Geffen Sotheby’s International Realty, says fueling the dearth of available homes at the lower end of the market is the fact that current home owners realise they will not easily replace their properties in the area so instead of selling when their needs change, many are opting to renovate instead.
However, she adds that despite the ongoing demand for apartments and houses priced below R15m, the market hasn’t been completely impervious to the flat economy, with most casualties being in the upper price bands above R20 million which are now taking noticeably longer to sell.
Another knock-on effect of the economic slump and political instability is a surge in rental demand.
Says Segal: “Many people are currently opting for top end rentals rather than tying themselves to long-term, high bond repayments so there is substantial demand for rental houses priced up to R70 000 a month, which is coupled with a growing stock shortage.”
House rentals in Bantry Bay and Fresnaye start at around R30 000 per month with the average top end of the market hovering at R100 000, although there are a number of ultra-luxurious homes priced significantly higher.
Apartment rentals generally range between R20 000 and R60 000 per month. Fresnaye does occasionally have a few options priced below R20 000, but these are usually snapped up soon after hitting the market.
Kaplan says: “Fresnaye and Bantry Bay are arguably the most sought-after residential suburbs in the country at the moment because of their unique positioning. The suburbs offer not only unsurpassed views from most properties, but they are secluded, protected and relatively wind-free compared to the rest of the exclusive Atlantic Seaboard strip”.
“They are also conveniently close to a choice of good schools, top-class amenities and the CBD, while still being within walking distance of several popular beaches and undeniably offer an incomparable lifestyle.”