Atlantic seaboard homes take off
Freehold house prices in the area in first half of year are up by over R1m
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.