Investors capitalise on Muizenberg beach apartment holiday rental returns
Category Property Markets
Investors are increasingly investing in beach apartments in Muizenberg, and, Ms Paddy Mow, a Seeff agent says that in ten years of operating on of the beach front, prices have more than doubled and have continued to rise year-on-year, irrespective of the economic or political climate.
Investors are increasingly seeing the Muizenberg beachfront as a good investment given the high demand for holiday accommodation. Visitors and holiday makers from all over the world come for the surfing, but get so much more, she says.
Surfer's Corner is really the heart of the village and everybody knows where it is. The promenade is now lined with coffee shops and eateries, but you are also next to the famous Kalk Bay strip where you will find a host of attractions. Muizenberg is also a great holiday base from which to explore Cape Point, the rest of the peninsula and winelands.
For investors, the equation is simple - today's price is tomorrow's bargain, she says, citing a few examples. In 2009, the entry level price for a small one-bedroomed apartment of 52sqm was between R630,000-R695,000. Currently, if fully equipped for short letting, sellers are achieving R1,5 million for a decorated interior and about R1,4m if unfurnished, equating to around 126% more on average.
A slightly bigger one-bedroomed unit of 61sqm with a balcony was selling for R730,000-R799,000. Today, she says, a fully equipped unit will sell for R1,65m-R1,7m, about 120% more.
Two-bedroomed units are also an excellent investment option, she adds. The entry level price has moved from R950,000-R1,1m for a non-sea-facing unit to R1,75m-R1,820m for a basic apartment and R1,95m for a fully equipped and furnished unit - both examples of recent sales by the agent.
Sea-facing apartments with two bedrooms are now selling for R3.1m, and if fully equipped for short letting purposes for R3,35m-R3.45m. That said, investors are well informed, and we have seen resistance to the R3,7m price mark, but sellers are still able to achieve good prices, she says.
Also popular are the three-bedroomed duplex penthouses, originally priced at R3,1m- R3,4m, so much so that the owners are resistant to selling these, having rejected a R4.5m cash offer presented by the agent.
Another benefit of the area is that there are two popular short let services located on the beachfront, with most investors using either Whale Watchers or Surfers Corner. Both offer a hands-on service. Property owners who have gone the Airbnb route have to arrange their own cleaning service, laundry, inventory check, client meet and greets, key handovers and so on, so most use the letting services on offer.
Investors can expect short let returns of around R1,030-R1,880/day for a one-bedroomed apartment, the upper end being the peak rate. A non-sea-facing unit with two bedrooms can command R1,730 and R2,520 during the peak season, and for a sea-facing unit, around R2,200/ day to R3,220/day. A three-bedroomed penthouse can achieve R3,150-R4,620.
The investment value of the area is well illustrated by the above, she says, adding that the area continues to evolve and develop to meet changing lifestyles and the demands of an evolving property market.
Contact Seeff Muizenberg, Ms Paddy Mow on 082 348 4442/021 788 8279 or visit www.seeff.com.
Photograph:Muizenberg beach front is popular with investor buyers looking for short let holiday rental returns
Author: Gina Meintjes