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Cape Town - Cape Town’s Atlantic Seaboard and city bowl closed the year with record high sales and prices, according to Seeff’s managing director for the areas, Ian Slot.
Across the Atlantic Seaboard sales of almost R4.8bn were concluded, more than double the R2.3bn of 2009, while the City Bowl’s R2.2bn amounted to 150% more than the R856m of five years ago.
Activity over the December also did not disappoint, says Slot. On the Atlantic Seaboard, real estate worth some R452.95m sold across the market for the month, more than double compared to the R210.483m recorded for December 2013.
Meanwhile, the CBD and city bowl’s sales of R147.28m was almost 80% more than the previous December.
Seeff’s sales for December for the area of R250m was more than double that of December 2013 (R115.998) while our turnover for the year topped R1.75bn, up by over 30% year-on-year, adds Slot.
This includes fourteen sales in the R20m-plus price band, four of which were concluded late last year.
The first is a luxury home in Fresnaye (Top Road) sold by luxury market specialist, Lance Cohen for R30m to an expat buyer from Mauritius along with a 1.663m² plot in Bantry Bay (Ave St Leon) sold to a local buyer for R31m.
Waterfront agents, Ross Levin and Kim Bailey also sold two luxury apartments at the Juliette and Parama complexes for R31m and R32m respectively, the latter being a joint sale to an Australian buyer.
With the global and recent, domestic economic outlook, much improved, it comes as no surprise that renewed holiday home buying along with an increase in foreign buying provided an added boost to the overall buoyant activity across both areas, says Slot.
While holiday home buying accounts for about 15-20% of activity, foreigners invested just over R1bn in real estate, about 20% of the total rand value of sales for the year across both areas. About 60% to 70% were UK and northern European buyers.
The average prices across the area are now 30% higher than five years ago, clearly demonstrating the investment value, says Slot.
Almost across the board, we have seen the market fundamentals shift into positive territory. Homes for example now sell for on average within one to two months of coming onto the market, down from three to six months five years ago.
Well priced properties below the R3m to R5m end of the market can sell almost as soon as it is listed, such is the demand.
There seems to be no indication of buyer fatigue setting in. Slot says that while most of last year was characterised by brisk demand and sales, buyer enquiries increased further since the start of the summer.
This is evident not only from the 16%-plus increase in Seeff's website hits, but the record sales noted for December further confirms this.
"We expect the favourable selling conditions to persist, at least for the first half of the year. Where we had anticipated starting the year on a rather subdued economic note with a potential interest rate hike, the drop in the crude oil and petrol price has lifted the mood significantly," he adds.
The net effect is a lower inflation outlook and expectation that the interest rate will remain on hold for a bit longer, something that will no doubt further boost market sentiment.
While residential buying is likely to be the biggest driver of demand across the areas, Seeff expects to see more investment buyers coming into the market this year, says Slot.
"Already, we have seen developers making a return and an increase in the demand for vacant land, in some instances the land shortage and desire for the right location, prompting buyers to snap up older homes with the view to demolishing and rebuilding," he said.
"Cape Town’s growing global acclaim has significantly boosted the demand and value of property over the last few years, especially on the Atlantic Seaboard and in the city bowl."
The improved economic outlook and sustained weakness of the rand against the dollar, pound sterling and euro will continue to making property here an attractive investment for local and foreign buyers alike, in his view.
