Cash-driven Atlantic seaboard growth looks to lead Cape market
NEXT YEAR looks likely to be a high trading period for property along Cape Town’s Atlantic seaboard as the cashrich area benefits from greater stock availability and affordable development, according to Brendan Miller, the Atlantic seaboard area principal for Lew Geffen Sotheby’s International Realty.
He saysone of the important changes expected to affect the area is a loosening up of stock.
“This year has really been characterised by a huge stock shortage across the country. We’re expecting this to loosen up relatively early (next year).
“This will have a huge effect on mobilising the market and allowing it to return to a sustainable and relatively normal state for the first time since the recession that began in 2008,” he explains.
Lew Geffen, the chairman of Lew Geffen Sotheby’s International Realty, says: “Buyers and sellers should look to the Johannesburg market when making decisions as it has historically been a good indicator of developments in Cape Town. This is largely because of Johannesburg’s position as South Africa’s commercial capital, meaning financial developments occur here first before rippling out to the rest of the country.”
The market for Atlantic seaboard homes in the R15 million to R20m price range grew by 15.2 percent over last year, according to Propstats, a sales database set up by the Western Cape branch of the Institute of Estate Agents.
It is expected to continue this growth throughout next year, says Geffen.
Agents are expecting a further increase in demand for sectional title units as they still offer superior value to houses.
Tied into this is the likelihood of growing developer activity, particularly as building costs are quite affordable at the moment, according to Absa’s latest quarterly housing review.
A weak rand, which the report says is not expected to strengthen, will also continue to attract foreign buyers to one of Cape Town’s most cosmopolitan areas.
“The area is popular with tourists thank to its beaches and proximity to the V& A Waterfront, South Africa’s most visited tourist destination,” says Miller.
Geffen adds: “The Atlantic seaboard is also notable for its high proportion of cash sales compared to those requiring bonds. With about 80 percent of our sales being cash deals, the Atlantic seaboard is well placed to lead the Cape in the recovery of the property market.
“Other suburbs with a higher proportion of bonded sales are having their growth stymied somewhat by the banks, which are rightly being conservative in their lending.”