In spite of the increasingly subdued economy and slackening real estate market, the Rondebosch sectional title sector demonstrated its resilience when a 250m² three-bedroom apartment realised a record sale price of R6.2 million at the end of July, beating the previous 2014 high of R5.6m achieved in the same complex.
According to Megan Milne and Justin Nortier of Lew Geffen Sotheby’s International Realty, who brokered the deal, Ecklenberg is one of the most sought-after complexes in Rondebosch as it ticks all the boxes on buyers’ wish lists.
“Not only is it situated in close proximity to top schools, the university, an array of amenities and main arterial roads, the secure complex is also remarkably well-maintained with a live-in caretaker to promptly attend to issues as they arise.”
Milne and Nortier add that sectional title units in popular complexes like Ecklenberg have become very popular with investment buyers, especially those seeking rewarding medium-term returns and savvy buyers are purchasing apartments to renovate and resell within a few years.
“Many of these investors are parents of students who hang onto the apartments after their children graduate because they realise it’s a good investment. Rondebosch has also always been an attractive option for first-time buyers, but they are now being pushed out of the market by a trifecta of steadily rising property prices, tighter lending criteria and spiralling consumer inflation.”
Entry level apartment prices now start at around R1m for a studio or older one-bedroom flat and R1.6m for a two-bedroom unit in need of considerable TLC, but when these units do come onto the market they are quickly snapped up.
Most popular, however, are apartments with two or more bedrooms, especially those that include safe off-street parking and 24-hour security.
“Depending on the condition of the flat and the location of the complex as well as the amenities offered, two-bedroom apartments in Rondebosch are now fetching up to R3m“.
“Three-bedroom apartments are also highly sought after as they offer students’ parents plenty of accommodation, which means higher rentals.”
“Security is high on the list of buyer priorities,” say Milne and Nortier, ”and complexes with external features such as electric fencing and internal burglar bars and alarm systems are most in demand. For security reasons, buyers also prefer flats that are on the first floor or higher.”
Lew Geffen, Chairman of Lew Geffen Sotheby’s International Realty, says: “The growth of the Rondebosch sectional title market is clearly evidenced by Lightstone data which reveals a steady year-on-year increase since 2011 when the median apartment price was R870 990″.
“Within two years the median sale price had risen to R1m, jumping to R1.3m in 2015 and, despite the flailing economy, by the end of 2016 it was sitting at R1.55m which translates to a very healthy nominal year-on-year price increase of 13.3% over six years. The current median apartment price is R1.65m and the average number of days apartments spend on the market this year was just 22“.
Geffen adds that because of the steady rise in apartment prices, there has been a drop in investment purchasing.
“Rondebosch is becoming an area of high capital appreciation as opposed to a buy-to-let area and it has become difficult to find properties where the rental covers at least 80% of bond repayments. However, Rondebosch lends itself as a dual investment area, meaning the properties experience good capital appreciation and good rental returns, making it a “safe and sound” investment area.”