PROPERTY: What Should You Pay for a View?
Recent Western Cape Business News
THERE have been a number of court cases in recent years concerning new developments or home alterations that have threatened to obstruct the view from a neighbouring property, so there is no doubt that homebuyers put a value on having a view – of the sea, the mountains or sometimes of the city lights.
This is also evident, says Gerhard Kotzé, MD of the RealNet estate agency group, from the fact that in any suburb with varied topography, the homes “on the hill” that offer a view will generally sell for more than those below. Similarly, at the coast the homes or stands with a good sea view always fetch higher prices than those without views or with only “partial” views.
And many luxury apartments even inland are sold for more if they offer good views. But just how much value does a view add? The answer, he says, isn’t actually clear-cut, as it depends on the local availability of “rooms with a view”, the quality of the view, the price range of homes in the area and of course the condition of a particular property.
“In an area where most homes have views, for example, you’ll probably pay less of a premium to have one than in an area where view homes are scarce. On the other hand, buyers will usually pay more for an unobstructed view – from a home right on the beachfront, for example – than one across the rooftops of other houses or filtered through trees.
“And the higher the average price of homes in an area, the more you’re likely to pay for a good view. In a coastal area where two-bedroom apartments cost an average of R600 000 for example, you can expect to pay an additional R50 000 to R70 000 for a clear sea view from a balcony, while in another where three-bedroom homes cost around R2,5m, you can expect to pay an additional R500 000 to R800 000 for that view.”
In lifestyle estates, where views are usually protected by HOA rules and architectural guidelines, Kotzé says there is virtually no limit on what buyers will pay for the best stands or the homes with best views of golf courses, mountains or winefarms.
Meanwhile in inland suburbs, homebuyers who want sweeping city views from an apartment or a hillside property could pay R1m or more than for a similar property without views -depending again on the status of the area, the rarity of the view and the condition of the property. “In some areas buyers are even prepared to pay well for older homes with good views actually just to acquire the land and position. They will then demolish the existing buildings and replace them with modern homes that maximise those views.
“This is not, however, that common, and in general buyers will not be happy to pay a ‘view premium’ unless the property as a whole is in good condition and has amenities - such as a second bathroom or proper garaging – that warrant the higher price. Most homebuyers do not want to have to embark on extensive renovations or additions.”
Buyer profile will also affect the value equation, he says. “If most buyers in an area are looking for homes in which to raise children, but all the view homes available in that area are on a steep hill and tricky to access or without gardens, those properties may actually be quite difficult to sell and fail to command any premium at all. Buyers will opt for more level stands that are easy to access, or they will go elsewhere.
“And of course, no view can compensate for a neglected neighbourhood at risk of going into a decline. In fact, it might even become a hindrance, since it will be harder to make a profit on the property you paid a premium for if prices in the area start to fall.”
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