Weekend Argus (Saturday Edition)
The Retreat market boom shows no instant signs of shrinking
THE property market in established Cape Flats suburbs like Retreat has blossomed in recent years as surging property values throughout Cape Town have continued to place the most sought-after areas further out of the reach of firsttime buyers.
Arnold Maritz, southern suburbs co-principal for Lew Geffen Sotheby’s International Realty, says that after many years of stagnation the market has sprung to life and the surge in demand has resulted in stock shortages being seen for the first time, and has also significantly bumped up average selling prices.
“For almost a decade, the average sale price of freestanding houses in Retreat fluctuated between R500 000 and R650 000, sporadically swayed by the prevailing economic climate but showing no real growth.
“However, in 2013 the city’s rampant property price inflation began to filter through to these suburbs and Propstats data shows that the average house price jumped from R642 000 in 2012 to almost R750 000 and, by the end of 2015, it had risen to just over R877 000.”
Maritz says the suburb’s market growth is further evidenced by the fact that the average time that houses in Retreat remained on the market dropped from 48 days in 2010 to just 29 days in 2015.
Agent Ruzia Fry says the adjacent enclave of Heathfield has also experienced exponential market growth in recent years.
“Heathfield has always been a little more expensive and during the 2007 property boom the average house price reached a record R866 250, but it dipped notably after the economic crash and by 2010 it was a little over R660 000.
“However, the market started to recover in 2012 when the average sale price nudged up to around R717 000 and by the end of 2015 it had risen to R1.17 million, continuing on its upward trajectory to R1.4m by the end of the second quarter of 2016. There was also a notable drop in the average time houses spend on the market; from 45 days in 2010 to just 15 days in 2015.”
Although the growing market in the Western Cape is without a doubt the main driving force behind the area’s steadily increasing market activity, Fry also attributes the buoyancy to other key factors.
“Suburbs like Retreat have strong family and community ties and most long-time residents would rather upgrade or renovate their existing properties than move away to another area. Young adults from these suburbs tend to buy their first home in the area to remain near family and friends.
“These suburbs are also becoming increasingly popular because they offer neat, well maintained homes, usually freestanding, with between three and five bedrooms at prices that are still very affordable.”
Buyers are also attracted by the conveniently central loca- tion which is close to several good schools and major shopping malls with excellent sports facilities nearby. The area is also well serviced by public transport.
Fry says the reluctance of residents to sell and move away has resulted in a shortage of available stock to service the growing demand.
“A whopping 75 percent of existing owners have lived in their homes for 11 years or longer; often for several decades.”
Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty says that the recently elevated status of these Cape Flats suburbs and the accessible prices are now attracting the swelling ranks of the growing middle class who are steadily moving up the wage and social scale.
“With many new investors able to offer more substantial deposits, bond approval rates for homes in the area are higher than ever before with agents reporting a hit rate in the region of 80 percent, which is high by any standard.
“We are even starting to see 90 percent and even occasionally 100 percent bonds being granted as more and more professionals move into these suburbs.”
The rental market has also had a major boost and, as is the case in most emerging middle class areas, rentals in Retreat have risen even faster than housing prices and there is a great demand for rental properties in the area.