Between a rock and the sea

A R1.2 million bond? Forget anything in and around the city centre

IF YOU want to live close to the city centre and the bank has agreed to lend you R1.2 million – where are you going house hunting?

Sadly almost anywhere in the Cape Town city bowl and Atlantic seaboard is going to be beyond your reach. But you may not have to move into the country, say local agents.

Property prices in Cape Town, particularly the city centre, are expensive compared to most of the rest of the country. This is mostly because the city is restricted on one side by the sea and on the other by the mountain, and there is little room to expand.

“If you have R1.2m and want to live close to the city centre, your options are limited, unless a studio or one-bedroom apartment meets your needs, and even then you will be at least 20 to 30 minutes outside the city centre,” says Wayne Albutt, Rawson Property Group regional sales manager for the Western Cape.

“Renting won’t necessarily be an alternative as demand has ensured that rents will also be out of reach.

“To qualify for a R1.2m mortgage you would need to earn around R30 000 a month and not many people would happily spend more than 50% of their gross income on rent.”

He says for R1.2m you could get a two or three-bedroom apartment in Maitland, while in Thornton or Rugby you could get a two or three-bedroom townhouse or apartment. In Milnerton you could find a small house or a one to two-bedroom apartment, and in Summer Greens a small three-bedroom house.

In Athlone, a one, two or three-bedroom apartment or a small two to three-bedroom house could fit your budget.

Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, says there are still opportunities to enter the market at R1.2m in Woodstock, Zonnebloem and Observatory, but the options are best suited to young professionals and couples just starting out.

“Families with children who want more outdoor space would need to look further afield towards suburbs like Retreat, Ottery and Zeekoevlei, where neat three-bedroom houses with small gardens can still be found for R1.2m.

“Alternatively, families could delay the purchase of a family house if they buy an apartment to enter the market and then resell within a few years, as property prices near the CBD are increasing rapidly.”

Craig Algie and George Clelland, Seeff agents for Mowbray, Observatory and Woodstock, say that for R1.2m you could find an older semi-detached cottage in Salt River or a small apartment in Observatory.

“You will have to forego space and probably won’t have secure parking, but you can enjoy all the benefits of investing in an up-and-coming area, close to the city.”

Roger Lawrence, Jawitz Properties agent in Pinelands, says Thornton offers good value for buyers in the R1.2m to R2.5m price range.

“The average prices of full title residential properties sold in the area increased from R1.175m in 2015 to R1.35m in 2016, putting this just outside a budget of R1.2m.

“However, the average prices of sectional title properties sold in 2015 was R520 000, increasing slightly to R535 000 in 2016. Thornton is close to the main access routes to and from the city centre.”

The agents agree that the main compromises when buying close to the city centre would be making do with less space – indoors and out.

Seeff chairman Samuel Seeff says part of the attraction of the metro is that you can find value, but you would need to shop around and depending on where you settle, you may need to forego conveniences, such as space.

If you work from home or don’t have to commute every day, outlying suburbs and towns are a viable option, with good schooling and amenities, and they have a much more laidback lifestyle away from the traffic and hubbub of city living.

Herbie de Klerk of Jawitz Properties in Kuils River says there are properties available in the R1.2m range, particularly smaller homes. A sectional title development here recently sold out at prices ranging from R580 000 to R899 000.

Keimpe Weistra, Pam Golding Properties area principal in Brackenfell, Bellville and Parow, says there are suburbs in the Brackenfell area where you can buy a small home for R1.2m. These include De Oude Spruit, De Tuin and Protea Village.

Annien Borg, PGP managing director for the Boland and Overberg regions, says that in Tyger Waterfront, Bellville, you can buy one or two-bedroom apartments with easy access to the N1 from about R900 000 to R1.2m.

Further afield, in Malmesbury and Wellington, you can still buy a two- bedroom townhouse for R1.269m.

Cape Town is a beautiful city, particularly at dawn, but lack of space caused by its geographical position with the sea and the mountains means property is at a premium.