Apart­ment sales in­di­cate boom for city

At­lantic seaboard and city bowl sell­ers cash in on grow­ing de­mand

Weekend Argus (Saturday Edition) - - PROPERTY -

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.

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