Apartment sales indicate boom for city
Atlantic seaboard and city bowl sellers cash in on growing demand
RECENT sales figures confirm that there is increased activity in the primary residential market on the Atlantic seaboard and in the city bowl, said Seeff ’s managing director for the area, Ian Slot.
“The area has a high concentration of apartments, so we track the sectional title sector with great interest as it is a good barometer of whether activity has improved.
“Sales data for apartments for the area as a whole show that activity this year is at the best levels since the economic downturn. In 2009, for example, only about 217 apartments worth just over R651 million were sold in these areas. By 2012, 639 apartments worth more than R1.8 billion were sold, and by the end of September this year 697 properties worth a l most R2.3bn had already been sold. This is already a 10 percent improvement compared with the whole of last year and there are still three months to go.”
Although a significant number of transactions in the area are cash sales, Slot said almost half of all apartment buyers in the sub-R2m price band relied on partial or full bonds. He believed the continued improvement in mortgages granted by the banks had boosted sales. In September, ooba, for example, reported that its effective bank approval rate strengthened to 66.4 percent, up from 65.2 percent in September last year. Deposit requirements had relaxed to around 14.1 percent on average, down from 17.9 percent in September last year.
Agents Hilary Biccari and Bianca Gutteridge attribute the buoyant demand to a rally by residential buyers, especially those who had been sitting on the sidelines over the past three years and now realise prices are not likely to drop any further.
“In fact, as the market gathers momentum, multiple offers are coming through, and sellers are beginning to get slightly more than their listing prices. Demand is almost across the board; old and renovated apartments and those with and without sea views are now selling. For example, an older apartment with no views or parking in Dunhof on Hall Road in Sea Point recently attracted 10 offers within a week of its listing. It was sold for R896 000, when t he l i sted price was R895 000.
“Two further recent sales in Sea Point illustrate the buoyant activity. We sold a one-bedroom loft apartment with tandem parking i n 3 6 Humewood within a week of listing it. It attracted two offers and was sold for R1.3m or R21 666/m whereas the previous highest price for a flat in the building was R18 103/m
“An un-renovated two-bedroom apartment i n Beach Court was also recently sold within two days of listing for R1.8m, just under the listing price of R1.895m.”
S e c t i o nal t i t l e a g e nt s , Adrian Mauerberger and Rosa Karp, said buyers were well informed and would only buy what they believed were goodvalue properties and would walk away from those that were overpriced.
“Older blocks, especially in Sea Point, are attracting huge interest and spacious, threebedroom flats especially are in short supply. A beachfront apartment with staff accommodation and a double garage in 259 On Beach was recently sold to the tenant for R4m before we could even list it. A 210m corner apartment, also on the beachfront in Rocklands, was sold for R7.4m to the first buyer who viewed it. A spacious apartment with direct lift access that occupies the entire top floor of One Bantry Road was also recently sold for R4.5m to the first buyer who viewed it.”
Slot said flats on the Atlantic seaboard and in the city bowl also continued to increase in value.
“An analysis of c apital growth on resale based on properties bought since 2009, after t h e e c o n o mic d owntur n , reveals that sellers achieved on average returns of 11.58 percent. Atlantic seaboard suburbs showed an average return on investment of 11.36 percent and the city bowl 8.58 percent. On an individual basis, those who have bought smart and held on to their properties for f i ve ye a r s o r more, h ave realised significantly better profits.”
Two recent sales in Sea Point illustrated this, said Biccari and Gutteridge.
“The first is a 168m apartment in The Avenues in High Level Road, which was bought for R245 000 in early 1989 and was recently sold for R4m, yielding a return on investment of 1 533 percent over the 23-year holding period.
“A 147m apartment in 259 on Beach On Beach was also recently sold for R4m. It was bought in early 2003 for R1.85m, which is a return of 116 percent and a profit of R2.15m.
“An apartment in Atlantica that was bought for R2.05m in mid- 2008 was recently sold within 60 days of listing for R2.335m. This i s a capital growth of 14 percent and a profit of R285 000.”
TOP OF THE POPS: A view of the popular Sea Point promenade where demand for apartments has increased property sales activity.
SEASONAL SHOWSTOPPER: This five-bedroomed villa above Bantry Bay regularly draws rentals of R120 000 a night, though this can treble over the festive season.