Surge in de­mand for At­lantic seaboard flats

Weekend Argus (Saturday Edition) - - PROPERTY -

DE­MAND for sec­tional ti­tle prop­er­ties con­tin­ues to out­strip that for houses in Cape Town’s space-strapped At­lantic seaboard.

Michael Bester, Lew Geffen Sotheby’s In­ter­na­tional Realty agent for Mouille Point and the Sea Point beach­front, says that sec­tional ti­tle prop­er­ties are mov­ing more quickly and prices are in­creas­ing faster than houses in th­ese ar­eas, a trend that is repli­cated along this de­sir­able coast­line.

Along the Sea Point beach­front this year, for ex­am­ple, sec­tional ti­tles are on the mar­ket for two months on av­er­age be­fore be­ing sold, though it’s not un­com­mon for prop­er­ties to be taken up within the first week of be­ing listed or be­fore be­ing ad­ver­tised. Houses have taken about six weeks longer to sell, ac­cord­ing to Prop­stats.

“Even though there are far fewer free-stand­ing prop­er­ties than apart­ments, they still don’t move as quickly as the flats,” says Bester.

In Mouille Point, where there are vir­tu­ally no free­stand­ing homes, the fierce de­mand, com­bined with a cur­rent short­age, has had a sig­nif­i­cant ef­fect on prices, driv­ing them up by more than 26 per­cent from last year, ac­cord­ing to Prop­stats. This is more than dou­ble the na­tional growth av­er­age of 12.1 per­cent, as re­ported in Absa’s most re­cent quar­terly hous­ing re­view.

The stock short­age on the At­lantic seaboard is partly ex­ac­er­bated by the high pro­por­tion of cash buy­ers, who, Bester says, make up at least 70 per­cent of his deals.

Lew Geffen, chair­man of Lew Geffen Sotheby’s In­ter­na­tional Realty, says: “In cash-rich ar­eas such as this, sell­ers are gen­er­ally not dis­tressed due to bond re­pay­ments or po­ten­tial in­ter­est rate hikes. They’re happy to keep their prop­er­ties and watch prices rise.

“The high pro­por­tion of cash buy­ers also means buy­ers don’t have to worry about deals fall­ing through due to bonds not be­ing ap­proved, so there’s less scope for the banks to limit growth through cau­tious lend­ing.”

“If you want a seafront view, you can ex­pect to pay R30 000/ m ² to R40 000/ m ² or more, whereas flats with par­tial sea views cost about R25 000 to R30 000,” says Bester.

One in­ter­est­ing quirk of the area is that as most of the prop­er­ties are sec­tional ti­tles, it’s vir­tu­ally im­pos­si­ble for older build­ings to be de­mol­ished to make way for new de­vel­op­ments. As a re­sult, there is a grow­ing mar­ket for apart­ments in old build­ings that can be bought more cheaply, and then re­de­vel­oped and re­fur­bished to mod­ern stan­dards.

“This is par­tic­u­larly pop­u­lar with peo­ple who are down­scal­ing from fam­ily homes out in the sub­urbs and have a bit of cash to pump into well-sit­u­ated re­fur­bish­ment prop­er­ties,” says Bester.

“This trend is likely to bol­ster the rapidly grow­ing value of the area, some­thing that hasn’t gone un­no­ticed by keen buy­ers around the coun­try.”

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