Record At­lantic seaboard sales as lo­cals snap up tro­phy homes amid de­mand

Weekend Argus (Saturday Edition) - - PROPERTY -

IN A RECORD sales month along the At­lantic seaboard, Lew Gef­fen Sotheby’s In­ter­na­tional Realty has con­cluded deals for properties cu­mu­la­tively val­ued at R120 mil­lion.

This comes as banks re­lax lend­ing cri­te­ria and ooba records its high­est lend­ing fig­ures in five years.

“Prices for properties sold along the At­lantic seaboard started in the low mil­lions and topped more than R30 mil­lion at the other end of the scale, with the aver­age home sell­ing for around R4m. This shows defini­tively that the high end of the mar­ket in Cape Town is re­cov­er­ing, with a par­tic­u­larly avid de­mand for the sea views on the At­lantic seaboard,” says firm chair­man Lew Gef­fen.

“This re­cov­ery is not con­fined to one small area of Cape Town though; other big-ticket sub­urbs across the city have also been show­ing more mar­ket move­ment and this is mir­rored in Jo­han­nes­burg. That’s what I find en­cour­ag­ing, be­cause an up­swing con­fined to one sub­urb or one group of neigh­bour­ing sub­urbs does not make a trend.”

Gef­fen says that al­though South Africa’s in­dus­trial heart­land of Joburg has been en­joy­ing un­prece­dented sales with an aver­age year-on-year trad­ing in­crease of 40 per­cent, on the At­lantic seaboard the high­end properties are par­tic­u­larly at­trac­tive to the for­eign mar­ket due to the de­pre­ci­at­ing rand, which is see­ing prop­erty cost 30 per­cent less than last month in rel­a­tive terms.

Al­most all of the buy­ers in the sub­urbs of Sea Point, Green Point, Mouille Point and Fres­naye have been South African, though, says Bren­dan Miller, chief ex­ec­u­tive of Lew Gef­fen Sotheby’s In­ter­na­tional Realty At­lantic Seaboard. He be­lieves that banks’ in­creas­ing will­ing­ness to lend and favourable prices are driv­ing the boom in sales.

The pic­ture is the same across South Africa. Bond orig­i­na­tor ooba recorded the com­pany’s high­est value of home loans ap­proved in five years in May.

“The value of ap­proved home loans in the month of May was 21.3 per­cent higher than in May in the pre­vi­ous year. May 2013 was also 362 per­cent higher than Jan­uary 2009, ooba’s low­est month in the mid­dle of the sub-prime, prop­erty and fi­nan­cial crises,” says Mar­ius Crook, ooba Western Cape sales man­ager.

The lat­est Re­serve Bank statis­tics re­leased (for Fe­bru­ary) also show a 1.6 per­cent year-onyear growth in mort­gage ad­vances, mostly as a re­sult of higher de­mand in the res­i­den­tial prop­erty sec­tor. The coun­try’s four ma­jor banks ap­pear to be eas­ing de­posit re­quire­ments as well, al­though lend­ing cri­te­ria is still strict.

“Al­though eco­nomic growth has slowed and the coun­try is fac­ing tough cost- of- liv­ing in­creases this year, low in­ter­est rates are still at­tract­ing buy­ers and those on the higher end of the scale are en­thu­si­as­ti­cally buy­ing be­cause, in rel­a­tive terms, prop­erty is very af­ford­able right now,” says Gef­fen.

Miller agrees, say­ing prop­erty prices along the At­lantic seaboard, one of South Africa’s most ex­pen­sive real es­tate ar­eas, have dropped in real terms over the past few years.

“At cur­rent lev­els there is great de­mand for homes, par­tic­u­larly sec­tional ti­tle properties, but as de­mand in­creases, prices will be­gin to re­flect this too.

“A lot of lo­cal in­vestors want to ex­pand their port­fo­lios in the cur­rent mar­ket con­di­tions and much of the real es­tate on the At­lantic seaboard is of the lockup- and- go va­ri­ety, which is be­com­ing in­creas­ingly pop­u­lar in those beach­front ar­eas as Cape Town’s rep­u­ta­tion as a prime t ourist des­ti­na­tion grows,” says Gef­fen.

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