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