Cash-driven At­lantic seaboard growth looks to lead Cape mar­ket

Weekend Argus (Saturday Edition) - - PROPERTY -

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.”

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