Development spurring the Gardens, Devil’s Peak markets
PROPERTY values in the City Bowl have increased substantially in recent years, with the market’s unwavering upward trajectory placing most of the previously affordable suburbs beyond the reach of many home-seekers.
However, there are still nodes that offer astute investors good value and reasonably accessible prices, affording them a foot on the ladder of an increasingly upper-end market.
This is according to Tina Katz of Lew Geffen Sotheby’s International Realty, but she cautions that while the more accessible suburbs like Gardens and Devil’s Peak still reward patient buyers with affordable investment opportunities, the time to buy is sooner rather than later.
“The resiliently buoyant market in this sought-after pocket of prime real estate is unlikely to abate soon as it continues to be driven by spiralling demand which is spurred by upcountry buyers and underpinned by the extensive ongoing development in the CBD.”
Devil’s Peak may be tucked away at the furthest edge of the City Bowl, modestly devoid of opulent mansions, but it enjoys an elevated prime position on the slopes of Table Mountain that affords most homes spectacular city and harbour views.
And, as it comprises 87 per- cent sectional title properties and 13 percent freehold homes, the suburb offers more accessiblypriced properties than most other suburbs in the City Bowl.
However, Katz says that while average sale prices in the most sought-after suburbs like Tamboerskloof have doubled since 2010, the gap between the average sale prices in Devil’s Peak and its more expensive neighbours is closing quickly.
“In 2012 the average sale price of an apartment in Devil’s Peak was R1.35 million and by the end of 2014 it had increased to R2.26m. At the end of August this year the average apartment price had risen to R2.47m.”
Katz says the suburb’s growing popularity is most evident in the small housing market where demand now outweighs supply.
“The average house price increased from R3.23m in 2012 to R4.13m by the end of 2014 but Lightstone data reveals there have been no house sales at all since August last year, as there simply isn’t enough stock because owners are hanging on to their investments.”
Claude Vanderstraeten, partner to Katz, says that although there are more freehold properties in Gardens (33 percent), the number of house sales has also decreased annually, from 21 transactions in 2011 to just eight sales in the past 12 months ending in August.
“While the drop in sales volumes can be attributed to the dearth of available stock, this is not only due to the surging demand.
The declining stock level has been exacerbated by the growing number of houses that are being rezoned and converted to business premises.”
Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty says that Gardens and Devils Peak’s strengthening markets are being driven by their predominant sectional title markets.
“As the City Bowl is nestled between the city and the mountain, there is very little vacant land in the area, so developers have to wait until homes with suitable sized stands come on to the market.
But as two adjacent stands are frequently required, they often need to make neighbouring home owners a convincing offer to sell.
“More buyers are now also investing in houses that either have GR4 zoning or are trying to change the zoning specification as commercial rentals command a high monthly return.”
Katz says these suburbs are increasingly attracting younger buyers who enjoy a synergy of vibrant city lifestyle in a suburban atmosphere.