Last year was a solid year for Cape Town’s Atlantic Seaboard, CBD and City Bowl property markets. While sales volumes were down compared to the mini-boom 2013/4 period and price growth slower, it was nonetheless an active year.
This is according to Ian Slot, Seeff’s managing director for the area, who says as they head into what will no doubt be a challenging year for the economy and country, and they do so with a still "nicely balanced" property market across the Atlantic Seaboard, CBD and City Bowl area. Stock levels are still fairly tight and they are seeing good demand.
Slot says last year’s sales for the whole area amount to about R6.7 billion, equating to just over a third of the value of all residential sales for the Cape metro, and there is no doubt that this residential area stands quite apart in terms of its resilience.
“For the CBD and City Bowl areas alone, some 582 units worth almost R1.835 billion were recorded on Propstats for the 2015 year. The average sales price was about R2.95 million. Sellers are on average still getting about 95% of the asking price, and some 40% of recent sales were still at just about or full asking price,” he says.
“The CBD, one of the most exciting apartment markets, ended on about 200 units sold to the value of just under R423 million at an average price of R2.1 million, almost twice as much as the 2010 average of R1.2 million. Notably, where almost nothing sold above R2 million five years ago, over 40% of last year’s sales were above this price level, a clear demonstration of the demand and value growth in the area.”
Slot says moving across to the Atlantic Seaboard area that stretches from the V&A Waterfront and Mouille Point area across to Camps Bay, they see a market that is now almost without parallel in terms of property values.
Sales for the 2015 year amount to some 676 units sold for a total of just over R4.9 billion, at a phenomenal average price of just over R7.4 million. The average is also almost 70% higher than what it was five years ago.
While the market has tightened over the last year, sellers are on average still getting just over 90% of the asking prices, although this varies considerably. This year though, sellers may well see more resistance if their price expectations are out of line with the market, he says.
Despite the overall slowdown in activity compared to 2013/4, most areas have seen property values grow year-on-year at inflation-topping rates, in some instances as much as 13% to 22%.
Lance Cohen, luxury market specialist and director of Seeff Atlantic Seaboard, says the top five suburbs of the Atlantic Seaboard - Clifton, Camps Bay, Bantry Bay, Fresnaye and the V&A Waterfront - now all command entry-level prices in the upper millions. Clifton has seen its average price rise by R5 million - from R14.75 million in 2010 to R19.75 million, a phenomenal 45% increase in just five years.
Cohen says where the average price of seaside apartments in Clifton only reached about R80 000 per square metre five years ago, it now comfortably reaches R100 000 to R120 000 per square metre.
The highest price paid for a house in the suburb is also up from R60 million five years ago for a property in Nettleton Road - the most expensive street in the country on average, by a whopping 85% to R111 million including VAT. New über-luxury houses with breath taking sea views, set high up in Nettleton Road are now priced to around R200 million, he says.
Camps Bay prices have also skyrocketed. In 2010, the average price in the suburb was R6.5 million. By 2015, it was some 50% more at just under R10 million. The highest price reached in Camps Bay in 2010 was just R14.5 million for a home in Bakoven. In 2015, some 11 homes sold for upwards of R20 million, to a highest price of R32 million, almost double the highest price achieved just five years earlier.
New über-luxury houses with fabulous sea views are now priced to just over R40 million.
Slot says Sea Point and Mouille Point, two high-density seaside suburbs characterised by a large number of apartment blocks, have seen enormous value growth since 2010 as well.
“In 2010, the average price of a Sea Point apartment close to the beach was around R2 million. By 2015, it had more than doubled to R4.2 million,” he says.
“The highest price paid in 2010 for an apartment on Beach Road was R8.4 million. Today, apartment prices in this area can reach R15 million to R20 million, more than double in just five years.”
He says the position is similar in Mouille Point. Five years ago, you could still find an apartment for around R3.2 million on average. Today, you are looking at around R7.8 million, a staggering 144% higher. Top-end apartments on the ocean can now reach prices of up to R20 million, and about R38 million to R40 million at the top end of the market.
Slot says the V&A Waterfront Marina is yet another area where prices have risen to the extent that the entry-level price for a two bedroom apartment is now upwards of R8 million on the canals, and as much as R15 million on the Front Yacht Basin.
“Where top-end R20 million-plus sales in 2010 amounted to only about 18 sales worth just over R700 million across the Atlantic Seaboard, this practically doubled last year with some 37 sales recorded to the combined value of over R1.2 billion,” he says.
“The highest prices achieved over the last year for houses include R70 million and R111 million for luxury villas in Clifton, and R33 million for a beach apartment in Bantry Bay.”
Slots says he expects the smart money to continue hedging their bets on Atlantic Seaboard and City Bowl property. Aside from local buyers, the area is now attracting quite a bit of interest from upcountry buyers from as far afield as KwaZulu-Natal and Johannesburg especially, with one Joburg buyer investing over R170 million in two top-end properties.
“While we are unlikely to see major fireworks this year given the challenging economic outlook, we do expect the market to remain positive. Those who want to get into the area are likely to do so if they find good value. For sellers, too, it remains a good phase, provided they remain realistic about their price expectations.”
Slot says the mountain, sea, Blue-Flag beaches, top-class infrastructure and desire for the lifestyle, along with the limited land, form a powerful combination that is likely to continue driving demand and property values.
“Everybody wants to live or invest in it, and if the price is right, they are likely to continue doing so regardless of the challenging economy,” he says