The central city and surrounds and the Atlantic Seaboard is experiencing strong demand for commercial offices and retail space, says Seeff's commercial consultant for the areas, Guy Friedberg. Demand is almost across the board, from older buildings to new Grade A prime office space developments and even houses suited for conversion in areas such as Vredehoek and Sea Point.
Consequently, we have seen rental rates edge up over the last two years by around 9% on average. There are also some areas in the central city such as Kloof and Long Streets where high demand is driving rentals rates up, says the agent. Business in the city and on the Atlantic Seaboard is booming and tenants are looking for office and retail space and are prepared to pay higher rates for the right premises, he adds.
There is growing demand for luxury homes in Hout Bay according to Seeff agent, Ingred Blicher Hansen who recently sold several luxury homes, priced upwards of R6,4 million to around R15 million. Driven by the wonderful village lifestyle, views and convenient access to the city, upper income buyers are increasingly heading here for better value for their money when it comes to luxury housing, she says.
The demand for property here is evident from the growth in sales to around 374 units to the value of just over R835 million last year compared to 278 sales worth around R614 million in the preceding year. That is a quite significant increase of 35% in the volume of sales and Rand-value. Most notably, says Blicher Hansen, around 28 properties priced above the R5 million mark sold, almost 50% more than the 19 sales in the year before with exceptional properties now fetching anything upwards of R10 million to R23 million.
The decision by the Reserve Bank's Monetary Policy Committee to retain the repo rate at 5,5% is a welcome reprieve for the property market and will further boost buyer confidence, says Seeff chairman, Samuel Seeff. For the first time in six years, we can confidently say that housing is in a growth phase and stability right now is more important than ever.
On the back of the continued sluggish economic growth and creeping inflation, a rate hike towards the third or fourth quarter of the year though is probably unavoidable, but Seeff says that for now at least, this decision is good news. Although a rate hike is unlikely to seriously dent the buoyant buyer activity, largely due to the pent-up demand that has been building over the last few years, it will affect the affordable, sub-R1,5 million sector of the market.
Just over two thirds of all residential property sales over the last year on the Atlantic Seaboard have been cash deals while more than half of all buyers of property in the CBD and City Bowl have been cash-rich, says Seeff's managing director for the areas, Ian Slot. Despite the still volatile economic conditions, we have seen notable growth in cash buyers over the last three years. In the last year alone, cash buying increased by over 10% in some areas and price bands as buyer confidence in property as a preferred investment grows, he adds.
Of the total of 3,785 sales transactions across the Atlantic Seaboard and City Bowl over the last three years, almost 60% (about 2,217 sales) - or two out of every three transactions - were cash deals, advises Slot. For the year ending March, about 68% (of the 768 sales) on the Atlantic Seaboard and 53% (of the 691 sales) across the CBD and City Bowl were cash transactions. This has resulted in a total direct cash inflow into the property market here of over R4,2 billion, says Slot.
Aside from strong demand for residential homes and farms in the scenic Swartland region, there is growing demand for weekend cottages and houses and lifestyle farms, says Seeff's licensee for the area, Simon Mouton. While still somewhat of a lesser known gem, a growing list of activities, tourist routes and festivals is adding to the attraction and boosting buyer interest, he says.
Reached via the N7 in under an hour's drive from the city, the Swartland stretches from the Paardeberg Mountains in the south to the Piketberg Mountain in the north. The stunning landscape of mountains, rhenoster bush (that turns black after the rain, hence the name Swartland (black land)) and rolling wheat and canola fields is a photographer and artist dream landscape.
A new assisted living retirement village, located within the Goedgevonden Lifestyle Estate in the village of Wolseley that lies between Tulbagh and Ceres has been launched. The development caters for the over fifty buyer demographic and is affordably priced, say Seeff agents, Nelia Retief and Niel Brand. Outright ownership of the units also means that they are an investment that is likely to grow in value given the demand for retirement homes and that they can also be resold at any time. The units can also be rented out.
The development is secure and enjoys stunning views of the Witzenberg Mountains and is located amidst scenic surrounds. It comprises 24 sectional title units of around 40sqm each. Each includes a bedroom with an en-suite bathroom, living room and kitchen. The price, inclusive of all costs is R590,000. A monthly levy of R360 that covers the cost of general maintenance, building insurance and security is also applicable. Medical and frail care assistance is also on hand with three affordably price options available. There is also a top private hospital a short distance away....
Buyers of residential property on the Atlantic Seaboard are getting younger and given that these buyers are likely to trade up in the next few years, this bodes well for the future of the market here, says Seeff's managing director for the areas, Ian Slot. A detailed analysis of the buyer and seller demographics here over the last twelve years, shows a clear shift in the buyer demographics from being overwhelmingly in the 35-plus age group pre-2008 to the 18-35 age group that now makes up about a quarter of all buying here, he says.
Market activity on the Atlantic Seaboard has improved steadily year-on-year from the post-recession hangover lows in 2009, driven by a combination of factors including an increase in buying by the under 35-age group, says Slot. Sales volumes here dipped to just 992 sales to the value of about R4,3 billion in 2008, down by 45% from the 1,795 sales transactions worth almost R8,4 billion in the preceding year. By last year, this had almost doubled since 2008 to 1,962 sales transactions.
The demand for a convenient, compact and secure lifestyle has seen apartment sales and prices across the suburbs of the Atlantic Seaboard and City Bowl reach a five-year high, says Seeff's managing director for the areas, Ian Slot. The apartment sector of the market here is quite substantial and our sectional title agents have been reporting record levels of demand. Severe stock shortages are now prevalent almost across the board, but especially in high density areas such as Sea Point, Green Point, Mouille Point, the V&A Waterfront, the CBD and City Bowl.
While the build-up in demand over the past three years has been gradual, we have seen a flurry of buyers heading to the apartment market in the last year especially, says Slot. Consequently, apartment sales for the 12-months ending April for the combined Atlantic Seaboard and central city areas surged to about 1,074 sales total value of almost R2,9 billion, says Slot. This is a significant 42% more than the 759 unit sales and 61% more than the Rand-value of just R1,8 billion of the comparative period three years ago (2011/12 period).
The housing market seems to be taking on a different tone, shifting from an overwhelmingly buyers' market to more favourable conditions for sellers in many areas, says Seeff chairman, Samuel Seeff. The prospects for sellers have improved month-on-month since about mid-last year and we have seen a strong start to this year, despite the economic setbacks and recent interest rate hike, says Seeff chairman, Samuel Seeff.
As we head into the cooler months, the market remains fluid and demand continues to heat up. Cash-flush buyers and those with good credit records, armed with their deposits are taking advantage of the favourable buying conditions. Homes are selling faster in the metros and, while FNB still points to an average selling period of around 15 weeks, we are in fact seeing realistically priced homes now selling within anything from 6-8 weeks and some even following the first show day.
The foreign and expat buying fever has spilled into Cape Town's southern suburbs, says Seeff's managing director for the area, Andy Todd. After an almost 5-year period during which buying by foreign nationals and South African expats were sporadic rather than a trend, about 20-30% of our buyers over the last few months fall into this buying category. Additionally, we have also seen an influx of upcountry buyers, mostly with the view to relocating to the city, he adds.
While the depreciation of the rand has obviously made property here more attractive for buyers, Todd says that the upward trend should also be seen in the light of the improvement in the economies of the UK and Europe. Likewise, the growing trade on the African continent is adding to the increase in African buyers.