Stock shortages of increasingly scarce and sought-after older houses priced under R12 million and apartments under R10 million are being experienced in Camps Bay.
This according to Edith Marsh, Camps Bay area specialist for Lew Geffen Sotheby’s International Realty, who explains that agents across the board are battling to acquire these properties to sell.
“Over the past few years there has been a growing trend of older houses on large plots being bought and demolished to make way for compact townhouse developments or imposing modern mansions. When these original Camps Bay homes do occasionally come onto the market, they are priced at around R12m,” says Marsh.
“The entry level for older apartments is around R6.5m, and R8.5m for existing townhouses. Modern luxury apartments are available from about R19.5m and modernised, renovated freestanding homes in the suburb now come in at around R22m“.
Data from Lightstone for the suburb ending August 2017 shows that the median price for freehold homes increased from R10m in 2015 to R12.5m in 2016, jumping again to R15.675 in 2017. Sectional title units have shown similar growth; from R5.9m in 2015 to R8.5m in 2017.
Although property in the suburb has steadily grown in value, there has been a notable decline in sales volumes and Lew Geffen, Chairman of Lew Geffen Sotheby’s International Realty, attributes this to several factors.
“Over and above the prevailing economy, sales are being affected by the dearth of entry level homes as well as the fact that a growing number of owners realise the value of their properties and hang on to their investments.”
Citing Propstats data, he says: “The sales volumes have dropped significantly since 2015 when 34 apartments and 68 houses changed hands. Last year 25 flats and 36 houses were sold and during the first 10 months of 2017, 12 sectional title and 25 house sales were concluded.”
Marsh says that sales have also been impacted by the growing number of body corporates that are amending regulations to prohibit short term leases and holiday rentals.
“Many out of town investors are looking for properties with income potential, so there is strong demand for sectional title units where short term lets are allowed, but many of the established apartment blocks are now clamping down.”
Two of the leading reasons cited for this are security concerns and disturbance to residents.
Camps Bay appeals to a broad spectrum of buyers, which is clearly reflected in the Lightstone data that reveals 45% of recent buyers are in the 36 to 49 age group, 38% are aged 50 to 64 and 11% are 65 or older. Unsurprisingly, just 5% are 18 to 35 years old. In contrast, 76% of recent sellers are over the age of 50.
The report also shows that among existing owners, 51% have owned their homes for 11 years or more, 25% for less than five years, 15% for five to seven years and 10% for eight to 10 years. Most of the recent sellers (63%) have owned their homes for less than five years, and 19% have been owners for 11 years or more. Just 12% have owned their homes for eight to 10 years and 7% for five to seven years.
Geffen says that although areas such as Camps Bay are not completely impervious to general market conditions, affluent suburbs are generally more resilient to economic fluctuations, continuing to offer solid returns well above the average national inflation rate on properties that are taken to market at a realistic price.
“Since 2011 the Camps Bay housing and sectional title markets have enjoyed solid year-on-year growth, and despite the subdued economy, record prices were achieved this year,” he says.