Green Point and Sea Point middle markets slow despite large overall growth

THE TRANSFORMATION of Green Point and Sea Point has accelerated over the past few years with rampant growth and development pushing up prices, especially at the lower end of the market where a studio apartment bought five or six years ago for R500 000 would now fetch from R1.2 million.

Michael Meade of Lew Geffen Sotheby’s International Realty from Sea Point to De Waterkant, says the unprecedented growth has caused demand for entry level properties to soar as investors clam- our to get a foot in the Atlantic seaboard market, with the upper end also holding its own despite the economic downturn.

“There has been a notable upward curve in demand for properties in the R8 million plus price band, especially exclusive penthouses, units in new luxury developments and all homes which are sea-facing with uninterrupted ocean views.

“However, the middle market has slowed considerably since the end of the second quarter of 2016, with much lower investor interest than in previous years during the same period.”

Meade attributes this decline to several factors, including inconsistent pricing and unrealistic seller expectations.

“Regardless of the prevailing economy, correctly priced homes in sought-after areas will always find willing buyers and are unlikely to remain on the market for long, especially if marketed correctly by the appointed agency.

“However, we are finding that many sellers in this sec- tor are adamantly asking for the highest rand per square metre being achieved in the area, usually in luxurious new developments, and when their properties don’t sell they jump between agencies and eventually end up reducing the listing price after much wasted time.

“A mandate with an experienced agent who can offer effective price counselling and a sound marketing strategy will always produce real buyers and reduce the length of time a home spends on the market.”

Agent Debra Levin says that another notable shift in the market has been a dramatic increase in investment purchases in these suburbs.

“South African investors are buying property to enter the buoyant rental market or to flip after renovation, and foreigners are attracted by secure lock-up-and-go holiday homes with short-term letting appeal.

“However, as the ongoing investment in new residential and commercial developments continues to drive the prices higher, we are now also seeing more ‘turn-key buyers’ who are not willing to revamp com- pletely.” Levin says the most sought- after buy- to- let properties are two-bedroom apartments, which are popular with young couples and professionals.

“We are currently marketing a selection of two-bedroom flats priced between R3.29m and R4.99m, but units in this price range aren’t always available and, to meet this strong demand, clever investors are taking advantage of the generous space found in older buildings.

“This is especially true of art deco buildings which usually have larger rooms and higher ceilings than modern apartments, and very often have beautiful wooden floors.”

Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, says: “The rampant development in these suburbs looks set to continue.

“Sea Point is usually the more popular suburb as it offers a wider selection of restaurants, shops and services than Green Point. It’s also on the beachfront, which offers residents a more relaxed, seaside lifestyle with sea views from many properties.”