Weekend Argus (Saturday Edition)

Sectional title, close to city, tops for living and letting

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THE CITY Bowl and in fact anywhere close to the city centre where big business is based, has become property gold for developers and homeowners alike.

And the sectional title market, with the allure of secure apartments, is ahead of the game, with properties being sought from Observator­y to Vredehoek and the Atlantic seaboard.

There is little doubt that the future of property lies largely in the sectional title sector, says Paul French, commercial director for Coastal Property Group.

The rise in demand for housing in urban areas combined with limited land space and a need for greater convenienc­e and security are just some of the driving factors.

Coastal Property Group agent Jason Paans says areas such as Cape Town’s CBD, the City Bowl and Atlantic seaboard continue to experience strong demand for sectional title property priced below R3m.

Over the past year, sellers achieved almost full asking price with a less than 3% on average below the listing price recorded for the market as a whole.

In the CBD and City Bowl especially, says Paans, sales are still concluded in a relatively short time, an average of just over a month.

Sometimes it becomes a bidding war as developers seek to secure land to meet the rising demand.

In Vredehoek, just above the city centre, this has seen some sellers achieving sales above their listing prices, says Sue Alison of Lew Geffen Sotheby’s Internatio­nal Realty.

“We saw this recently when three buyers were bidding for one property. First prize for developers is a row of older homes they can replace with multiple dwellings, so it can easily become a bidding war.”

Lew Geffen, chairman of Lew Geffen Sotheby’s Internatio­nal Realty, says the spike in demand in this market is illustrate­d in Vredehoek by an analysis of Propstats sales data.

“In 2012, the average sale price of an apartment in Vredehoek was R1.2 million after an average listing time of 72 days…. by the end of 2016, the average apartment had skyrockete­d to R2.8m, which ultimately translates to a very healthy nominal year-on-year increase of 13.7% over five years.”

Dinis Martins, Seeff ’s COO for the City Bowl and Atlantic seaboard, says the popularity of apart- ment living is fuelled by a number of factors.

“Because of the lack of worklife balance, people are starved for time and no longer want large homes and gardens, or to spend too much time commuting. (See story, above right)

“And apartment living often comes with added amenities such as on-site gyms, swimming pools and secure grounds to enjoy the outdoors. Plus the obvious factors of security, accessibil­ity to the property market and compact living that is not short on space or luxury finishes.”

It used to be just young, job-market entrants and older people who would look for flats to rent, but these days, says Martins, it is across the board – even young families want flats to rent. And they don’t just come from within the metro, but from across the country.

This is good news for people wanting to invest in bricks and mortar, especially in view of the good yields right now, says Martins.

Landlords should achieve yields of around 6% to 7% this year.

“The biggest demand is in the R20 000 to R30 000-a-month range, generally for two and three-bedroom apartments.”

The short- term market has also seen tremendous growth with landlords achieving from R1 000 to R6 000 a day on average in Sea Point. Luxury properties can achieve from R20 000 a day.

In Vredehoek, Denise Schmidt, of Lew Geffen Sotheby’s Internatio­nal Realty in the City Bowl, adds that a major driving factor in the sectional title market in the area is also the strong demand for rental properties.

“Typically, a two- bedroom apartment in Vredehoek can fetch between R14 000 and R18 000 a month, with new two-bedroom flats even fetching up to R25 000, especially if they include secure offstreet parking.”

‘The future of sectional title sector’

 ?? PICTURE: SEEFF ?? Apartment living along the Atlantic seaboard has seen some properties fetch high rentals from tenants seeking lifestyle and exclusivit­y.
PICTURE: SEEFF Apartment living along the Atlantic seaboard has seen some properties fetch high rentals from tenants seeking lifestyle and exclusivit­y.

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