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Send  Share  RSS  Twitter  30 May 2011

PROPERTY: Sustained Improvement In Cape Town


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The slow but steady recovery of the Cape Town residential property market continued into the month of April (2011), says Pam Golding Properties’ MD for the Western Cape metro region, Laurie Wener.  “Pam Golding Properties (PGP) saw sustained improvement in market activity across all price ranges,” she says, “and there was a small but noticeable improvement in most areas, particularly the Southern Suburbs, South Peninsula and Atlantic Seaboard.  Our sales were mainly to local Cape-based buyers, mostly end-users intending to live in the properties.  But there was also a continued modest resurgence of investors using high levels of cash equity to leverage good deals.”

Wener says the improvement came as something of a surprise, given the number of public holidays, school holidays and days of religious significance during the month.  “So many people took advantage of the numerous public holidays to take extended leave with their families,” she says, “that our expectations had actually been fairly muted going into this period.  We were also keenly aware that homeowners had to absorb a number of price increases from the start of April, including electricity, rates and the petrol price increasing by significant amounts.  Coupled with an expectation of increased food inflation as the year continues, and the ongoing impact of negative international sentiment, this must be giving potential buyers pause for thought.”

At the same time however, Wener acknowledges that Cape Town enjoyed excellent international exposure over the months of March and April, and into early May.  “The city was ranked in first place on TripAdvisor’s list of Top 25 Destinations in the World, as voted in the Travellers’ Choice Awards for 2011.  This is the world’s largest travel website, attracting millions of voters from all over the planet.  So it is a huge shot in the arm for the city to be ranked in first place, ahead of top international destinations like New York, Rome, Paris, London and Sydney.  And there are other indicators of the growing international awareness of our city, such as Table Mountain reaching the final 28 contenders for the New7Wonders of Nature, or this year’s record-breaking field of nearly 23 thousand runners in the Two Oceans Marathon.  There is definitely a sense of growing exposure for our city’s brand internationally, which has many potential positive spin-offs for the property market.”

Among the top performing areas in the Cape metro region in April was the Atlantic Seaboard.  PGP’s area manager Basil Moraitis says there have been strong sales in sectional title since the start of 2011 - but he says April saw a marked improvement in the housing market as well.  “Our agents sold over R100 million in full title properties on the Atlantic Seaboard in April,” he says.  “One of these sales was to a Belgian buyer, but the rest were predominantly to local Cape buyers.  It was also noticeable that a number of properties that have been on the market for an extended period, but which are offering good value, are starting to move again.”

PGP’s area manager for the Southern Suburbs, Howard Markham, says there have been isolated pockets of high activity in this area since the start of the year, and April saw a continuation of this trend.  “Rondebosch and Newlands in particular have seen high demand,” he says.  “Since the start of 2011 our agents have sold 14 properties in central Rondebosch, at an average of around R3.2 million per home, as well as seven homes in Rondebosch Park Estate, averaging around R2 million per sale.  Newlands has seen 13 sales average closer to R4 million, including two top-end deals of R11 million and just under R10 million.  A further 13 deals were concluded in Claremont, 10 in Pinelands, seven in Plumstead and five in Tokai, during the period January to April 2011.  Our Constantia agents have concluded 11 sales this year, and it was heartening in April to see a definite resurgence of activity at the top end of the market in this popular suburb.”

Wener says access to bond finance remains a challenge for buyers, particularly in the lower price brackets, and notes that April saw a high number of cash buyers in the Western Cape metro region.  “It will be interesting to monitor these trends into the winter months, traditionally a somewhat quieter period for the Cape Town property market,” she says.  “However the one area where we anticipate seeing renewed interest regardless of seasonality is the Western Seaboard.  The long-awaited opening of the Bus Rapid Transit (BRT) route from Table View into the Central City has cast a new spotlight on this area, making it particularly appealing for professionals and young couples wishing to work in the city but live closer to the beach.”

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