Weekend Argus (Saturday Edition)
Why buying property here is a no-brainer
Market in Cape Town’s ‘academic belt’ continues to offer solid returns and good value
THE SOUTHERN suburbs stretch known as the “academic belt” because of its proximity to the University of Cape Town (UCT) continues to offer property investors solid returns on investment and good value compared to other southern suburbs, says Tina Malyon of Lew Geffen Sotheby’s International Realty.
“Properties that are correctly priced in areas like Rosebank and Rondebosch are snapped up almost immediately,” Malyon says.”These suburbs were traditionally dominated by freehold properties but sectional title developments have mushroomed in recent years in response to the growing demand for student accommodation. However, in spite of the new developments, we are now experiencing stock shortages in this sector and sectional title units in the R1.5 million to R2m price band sell almost immediately when they do become available.”
Malyon says that Rosebank and Rondebosch have managed to retain their character and charm while embracing the vibrancy introduced by the growing influx of students.
“Rosebank is one of Cape Town’s most established suburbs with a very stable resident base, many of whom have lived in the area for over a decade.”
This is confirmed by a recent Lightstone property report which reveals that 34 percent of Rosebank’s resident property owners have lived in the area for more than 11 years and 14 percent have resided in the suburb for between eight and 10 years.
Malyon attributes this to several key factors, including proximity to the city centre as well as good local schools and the university, excellent medical facilities and retail offerings.
“Both suburbs are also divided into distinctive nodes whi c h a t t r a c t d i f f e r e n t investors. In Rosebank the ‘affordable’ node lies below the s u b u r b ’ s Met r o r a i l l i n e whereas the pocket above the track is home to many of Rosebank’s grand Victorian properties with several of the finest houses enjoying views of Devil’s Peak.”
Home to the main UCT campus, Rondebosch is also bisected by the railway line with its younger residents located near the university. However, being a larger suburb comprising several areas with different property options, Rondebosch remains extremely popular with families.
Citing Propstats data, Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty says that property values there are steadily increasing. “In 2014 the average sale price of a sectional title property in Rondebosch was just over R1.5m, with figures for 2015 to date reflecting an increase of just over R150 000 taking the median price to R1.65m. Freestanding properties have also fared well with an average sale price of R3.87m in R2014, jumping to R4.4m just a year later.”
Geffen says that although Rosebank has always been a little more accessible from a price perspective, increased demand and dearth in available properties have caused values to spike over the past year with average freestanding property prices increasing from just over R2.8m in 2014 to R3.95m to date in 2015.
And Rosebank’s soughtafter double- storey Herbert Baker buildings, which typically straddle plots of around 1 500m², can sell for as much as R7m if they become available.
“Sectional title properties have also fared well,” says Geffen, “with the median sale price increasing from R1.08m in 2014 to R1.16m to date in 2015.”