City prop­erty best in SA

Weekend Argus (Saturday Edition) - - NEWS - JAN CRONJE

THE Cape Town hous­ing mar­ket was one of the few to show dou­ble-digit growth rates this year, with house prices in the Mother City up by 10.1 per­cent, some 4 per­cent­age points higher than the na­tional av­er­age.

An­drew Gold­ing, chief ex­ec­u­tive of Pam Gold­ing Prop­erty Group, said while growth in Cape Town had been solid, hous­ing prices re­mained flat across the coun­try as a whole, only in­creas­ing at one per­cent above in­fla­tion.

The Western Cape hous­ing mar­ket was the best per­former of all prov­inces, grow­ing at a touch over 8 per­cent in the year to date.

Speak­ing at the es­tate agency’s head of­fices on Thurs­day, Gold­ing said house price growth was un­likely to change much next year, un­less the lack­lus­tre eco­nomic growth rate im­proved.

This view was shared by FNB hous­ing econ­o­mist John Loos, who in the bank’s lat­est prop­erty barom­e­ter wrote there was “noth­ing on the hori­zon ... that looks likely to al­ter the fun­da­men­tals (of the mar­ket)”.

Na­tional house prices growth av­er­aged 5.8 per­cent in the first 10 months of the year, down from last year, when it av­er­aged 7.1 per­cent.

There were out­ly­ing ar­eas, par­tic­u­larly lo­cally, where Gold­ing said things were dif­fer­ent; prices of res­i­den­tial prop­er­ties in the sought-af­ter sub­urbs along the At­lantic se­aboard in­creased by 25 per­cent.

There was also in­creas­ing de­mand for “se­cure life­style es­tates”, par­tic­u­larly close to towns such as Stel­len­bosch, Som­er­set West, Paarl and Welling­ton.

In Stel­len­bosch, there was again “huge de­mand for stu­dent ac­com­mo­da­tion”. “Apart­ments (are) snapped up by par­ents for chil­dren at­tend­ing univer­sity as soon as they be­come avail­able,” said Gold­ing.

Rentals in the univer­sity town, which has 30 000 stu­dents, ranged from R12 500 to R15 000 for two-bed­room apart­ments – sim­i­lar to, or even higher than com­pa­ra­ble prices in the City Bowl.

Gold­ing said the 25 per­cent growth rate along the At­lantic se­aboard was in part the re­sult of wealthy res­i­dents from Gaut­eng and KwaZulu- Natal mov­ing to the Mother City.

New projects were in fact of­ten mar­keted to Jo­han­nes­burg buy­ers specif­i­cally.

For ex­am­ple, the first phase of the agency’s new Yacht Club de­vel­op­ment near the V&A Water­front en­trance was sold out to buy­ers in days.

When its sec­ond phase was launched on the Jo­han­nes­burg mar­ket early last month, 60 per­cent of units sold on the first night.

Prices at the top-end de­vel­op­ment range from R45 000 and R60 000 per square me­tre.

Th­ese prices were still low when com­pared to sim­i­lar af­flu­ent ar­eas in ci­ties such as New York or Lon­don, Gold­ing pointed out.

In New York, lux­ury apart­ments cost an av­er­age of R189 000 a square me­tre, while those in sought-af­ter bor­oughs of Lon­don, such as Chelsea, cost R250 000.

Gold­ing said in­ter­na­tional in­ter­est for top-end Cape Town prop­er­ties was muted, when com­pared to the pe­riod be­fore the 2008 hous­ing mar­ket crash.

In past 12 months, 3 per­cent of Pam Gold­ing’s prop­er­ties were sold to in­ter­na­tional buy­ers, down from 8 per­cent pre-2008.

He ex­plained that for­eign sen­ti­ment had soured fol­low­ing Pres­i­dent Ja­cob Zuma’s an­nounce­ment in Fe­bru­ary that for­eign na­tion­als would not be al­lowed to own land in South Africa.

While Zuma later clar­i­fied the re­stric­tions ap­plied only to agri­cul­tural land, not to res­i­den­tial prop­erty, he said the dam­age had al­ready been done in the days be­tween the an­nounce­ment and clar­i­fi­ca­tion.

“The mes­sage got out the wrong way first,” Gold­ing said.

But the Land Hold­ings Bill did have a sil­ver lin­ing.

Es­tate agen­cies had for the past 15 years been seek­ing clar­ity about whether the gov­ern­ment would re­strict house own­er­ship.

With Zuma’s an­nounce­ment, at least they knew where they stood, he said.


BUCK­ING TRENDS: Prop­erty prices along the At­lantic Se­aboard have in­creased by 25 per­cent in the past 12 months.

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