At­lantic seaboard homes take off

Free­hold house prices in the area in first half of year are up by over R1m

Weekend Argus (Saturday Edition) - - PROPERTY - SATUR­DAY

HARD TO be­lieve per­haps in view of the eco­nomic cli­mate, but the average price of free­hold houses on the At­lantic Seaboard for the first half of this year is up by R1.1 mil­lion com­pared to the same pe­riod last year, ac­cord­ing to Billy Raut­en­bach, sales man­ager for Se­eff ’s At­lantic Seaboard and City Bowl op­er­a­tions.

“This is de­spite a year-on-year dip of about 9 per­cent in the num­ber of sales,” she says.

“Although the mar­ket is no doubt tough­en­ing up, free­hold houses are still hot sellers with sales since the start of this year al­ready top­ping R1.166 bil­lion. The average sales price stands at R13.1m – ex­clud­ing the re­cent ex­tra­or­di­nary R290m sale – com­pared to just un­der R12m for the first half of 2015.”

“Of the 90-odd sales recorded on Props­tats so far for this year, only about 11 per­cent, or 10 sales fall in the up to R5m price band. Most of the sales have been in the mid-mar­ket ar­eas of Green Point and Sea Point. Houses in this price sec­tor are very dif­fi­cult to find and ba­si­cally sell al­most as soon as they hit the mar­ket,” says agents Jes­sica Rother and Deb­bie Kop­ing.

The R5m to R10m price band was by far the busiest, ac­count­ing for al­most half of all sales with about 40 units sold at an average price of around R8m, com­pared to R7.6m dur­ing the same pe­riod last year. The bulk of the sales have been in Fres­naye (13) and Camps Bay (10) and a sin­gle sale in Clifton.

The next price band, the R10m to R20m range ac­count for about 30 per­cent of all sales (28 units) and an average price of about R13.5m, down some­what from last year’s average of R14.1m. Most sales have been in Camps Bay (12 units), fol­lowed by Fres­naye (6 units) and only two in Bantry Bay.

No­tably, there were also five sales in Green Point and three in Sea Point, says Raut­en­bach.

Any well-priced free­hold house priced be­low R15m in the Fres­naye and Bantry Bay ar­eas still at­tracts a lot of at­ten­tion ac­cord­ing to agent, Karen Lurie. In Fres­naye for ex­am­ple more than 80 per­cent of sales were be­low this price band.

The R20m-plus sec­tor of the mar­ket has been a lit­tle more ac­tive with 15 units sold com­pared to 13 sales for the same pe­riod last year.

“The to­tal value gen­er­ated of R755.291m, ac­counts for more than half of the value of all free­hold house sales on the At­lantic seaboard this year,” says Raut­en­bach.

“The average price for this sec­tor stands at R33.2m, slightly up on last year’s average of R32.5m.

“The high­est num­ber of sales of R20m-plus were made in Camps Bay (seven units) fol­lowed by Bantry Bay (three units) and Fres­naye and Clifton at two sales each.”

Agent Lance Co­hen says that although buy­ers at the top end of the mar­ket are now quite dis­cern­ing, the level of con­fi­dence re­mains high as demon­strated by the fact that prices of R100m to just un­der R300m have now been achieved here.

“The mini-boom of 2013 to 2015 pushed the top end of the mar­ket to a whole new level of de­sir­abil­ity and value. In­vestors are now so con­fi­dent that the lux­ury villa in Net­tle­ton Road sold early last year for R111m is now back on the mar­ket for R150m and the value is there,” says Co­hen. “Of the dozen or so homes on the mar­ket priced at R50m-plus, only about four top R100m, two each in Clifton and Fres­naye.

“Th­ese homes have taken the area to a whole new level with world class ar­chi­tec­tural de­sign, mag­nif­i­cent sea views, well over 1 000m in floor space and just about ev­ery lux­ury ad­di­tion you can imag­ine. It is there­fore no sur­prise that buy­ers are will­ing to pay sub­stan­tial prices,” says Co­hen.

Raut­en­bach says that while free­hold house sales only com­prise about 20 per­cent of the overall mar­ket in units, they ac­count for about 40 per­cent of the to­tal value gen­er­ated since 2000. Free­hold houses also still achieve the high­est prices on average.

An anal­y­sis of Light­stone trans­fer data re­veals that from 2000 to early 2015, 5 525 free­hold houses were sold for a com­bined value of just over R26.725bn.

Post-2007/8, the mar­ket peaked in 2014 with 339 sales worth just over R3.071m. The average sales price of a free­hold house mean­while more than dou­bled from R5.531m in 2007 to about R13.1m now.

For sellers, it has been a rather for­tu­itous pe­riod since 2007 with plenty of buyer interest, good prices and an average re­turn on in­vest­ment of around 17 per­cent a year over eight years.

The mid-mar­ket ar­eas per­formed best overall with Three An­chor Bay sellers achiev­ing the high­est re­turns (21 per­cent over seven years) fol­lowed by Sea Point (18 per­cent over eight years), De Waterkant (17 per­cent over eight years) and Green Point (16 per­cent over eight years). Bakoven mean­while achieved 17 per­cent and Camps Bay 14 per­cent, both over nine years. Fres­naye achieved 17 per­cent, Clifton 16 per­cent and Bantry Bay 15 per­cent, all mea­sured over eight years.

Raut­en­bach says that while the rea­sons for the stel­lar growth in de­mand and val­ues, the re­sort life­style and views, are well doc­u­mented, the sta­tis­tics at­test to the fact that the con­fi­dence in the area is not mis­placed.

This 1 000m2 Fres­naye home is for sale at R125 mil­lion. Fea­tures in­clude an in­door wa­ter fea­ture with a float­ing stair­case above, a cin­ema and a bar room.

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