Cape sees new buy­ing trends

Mi­gra­tion to Cape Town is re­flect­ing new home own­er­ship trends, writes Anna-marie Smith

Business Day - Home Front - - HOMEFRONT -

THE lat­est FNB Home Loans Prop­erty Barom­e­ter find­ings showed that the Western Cape con­tin­ues to out­per­form SA’s eight other prov­inces in its abil­ity to at­tract re­peat home buy­ers (those with mul­ti­ple homes, or buy­ing again af­ter hav­ing moved out of the prov­ince) from other prov­inces.

This re­port also showed that Cape Town had the best net in­ward mi­gra­tion for the past decade or more. Clin­ton Mar­tle, FNB’s Prop­erty Leader Strate­gist, based in Cape Town, says: “Look­ing at res­i­den­tial prop­erty transactions can pro­vide an in­di­ca­tor of the com­pet­i­tive­ness of SA’s dif­fer­ent re­gions.” These in­di­ca­tors re­fer to the level of em­i­gra­tionre­lated sell­ing of prop­erty, “sem­i­gra­tion”-re­lated sell­ing (for those who live in one area and com­mute dis­tances to work, or who buy prop­er­ties for their stu­dent chil­dren) and for­eign buy­ing in the re­gion.

Rea­sons for mi­gra­tion are pos­si­bly linked to the eco­nom­ics of a re­gion, when look­ing at why skilled labour is at­tracted to spe­cific ar­eas. In the same re­port John Loos, FNB House­hold Sec­tor and Prop­erty Econ­o­mist, said: “The Western Cape 2011 net mi­gra­tion per­for­mance is very much ‘more of the same’, with the prov­ince hav­ing had the best net in­ward mi­gra­tion for the past decade or more.” He said this should be a key source of longterm sup­port to the prov­ince’s econ­omy. The re­view draws on in­for­ma­tion em­a­nat­ing from FNB’s Es­tate Agent Sur­vey, as well as Deeds Of­fice data anal­y­sis, re­gard­ing re­peat buyer in­ter-pro­vin­cial mi­gra­tion trends.

In meet­ing de­mand from lo­cals as well as the “semi-gra­tion” and mi­gra­tion com­po­nents of the mar­ket, are new prop­erty developments cur­rently seen across Cape Town, fi­nanced by large prop­erty de­vel­op­ers and bank­ing in­sti­tu­tions. De­vel­op­ers are cater­ing for dif­fer­ent seg­ments, from sub­sidised af­ford­able and gap hous­ing, to stu­dent ac­com­mo­da­tion, hous­ing for mid­dle to up­per in­come groups, in­vestor prod­ucts for rent, and re­tire­ment fa­cil­i­ties.

Large mod­els by de­vel­op­ers such as Calgro M3 Hold­ings, in­clud­ing Scotts­dean and Belhar in the north of Cape Town, pro­vide turnkey so­lu­tions for a range of home­own­ers of vary­ing in­come groups. This could be students with sub­sidised rentals, re­quir­ing hous­ing near ed­u­ca­tional in­sti­tu­tions, as well as those with so­cial hous­ing sub­si­dies, where close prox­im­ity to pub­lic trans­port is es­sen­tial.

In com­ment­ing on de­mand trends, Derek Steyn, ex­ec­u­tive di­rec­tor at Calgro M3, says while cater­ing for all the dif­fer­ent fund­ing com­po­nents within the af­ford­able hous­ing sec­tor, in­clud­ing the gov­ern­ment’s new Fi­nance Linked In­di­vid­ual Sub­sidy Pro­gramme (Flisp), the com­pany de­vel­ops new prod­ucts based on due dili­gence con­ducted to in­clude spe­cific mar­ket de­mand and cost ef­fec­tive­ness in fo­cus ar­eas.

Grow­ing de­mand is also seen for earn­ers in the R25,000 to R30,000 in­come brack­ets, where sta­ble, joint in­comes fa­cil­i­tate so­phis­ti­cated life­styles in subur­ban ar­eas. De­vel­op­ment Pro­mo­tions Na­tion­wide (DEVPRO), spe­cial­ists in prop­erty de­vel­op­ment fi­nance in co-op­er­a­tion with ma­jor banks and de­vel­op­ers, has ob­served mar­ket trends based on con­sumer spend­ing in the newly built hous­ing sec­tor.

DEVPRO owner Sophia Vorster says: “We are see­ing mas­sive de­mand for own­er­ship as op­posed to rentals, and of hous­ing prod­ucts above R50,000 to just be­low R1m price range, with typ­i­cal mea­sure­ments rang­ing from 80m² to 120m² of free­stand­ing houses, in well es­tab­lished ar­eas.” She says developments such as Stonewood in Brack­en­fell in Cape Town’s North­ern sub­urbs, that pro­vides “se­cure, no mess, no fuss, no car­ports, but dou­ble garages plus three bed­rooms” are par­tic­u­larly pop­u­lar with first time home buy­ers, with joint monthly in­comes of up to R30,000, as well as di­vorcees.

An­other trend, she says, is the de­mand for so­phis­ti­cated hous­ing in the Park­lands area near Blou­bergstrand, of houses mea­sur­ing 115m² to 150m², in the R1.1m to R1.5m price range. Vorster says typ­i­cal pro­files of new home own­ers here are of se­nior and mid­dle man­age­ment gov­ern­ment em­ploy­ees, from pro­vin­cial as well as na­tional of­fices, where buy­ers pre­fer pay­ing cash de­posits, as op­posed to trans­fer costs on pre­vi­ously owned prop­er­ties.

She says an­other trend is seen in the R625,000 up to R2.4m price range, re­flect­ing a pref­er­ence for liv­ing in smaller developments lim­ited to 15-20 units.

Semi-gra­tion and mi­gra­tion is also con­tribut­ing to new stu­dent ac­com­mo­da­tion de­vel­oped in Cape Town’s south­ern sub­urbs, and Stel­len­bosch. Mar­ket­ing man­ager at Raw­son De­vel­op­ers, Trevor We­ston-Green, says mi­gra­tion def­i­nitely plays a role in stu­dent ac­com­mo­da­tion, when con­sid­er­ing the high num­bers of buy­ers from Gaut­eng and Dur­ban. He says own­er­ship can roughly be split into 40% in­vestors buy­ing to rent, 40% par­ents buy­ing for off­spring, and 20% pri­mary res­i­dences of in­come-earn­ing young pro­fes­sion­als, rang­ing from R800,000 to R1.8m, de­pend­ing on unit mea­sure­ments.

He says in­sa­tiable de­mand has driven Raw­son’s de­but in Stel­len­bosch, where de­spite the scarcity of va­cant land, 32 units at The Acorns will be built on two plots cleared by de­mo­li­tion.

Also re­flect­ing con­fi­dence in the mar­ket is Ra­bie Prop­erty Group’s R255m Palm Royale, that will be part of the award win­ning Oa­sis Lux­ury Re­tire­ment Re­sort at Cen­tury City.

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