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Here’s where to invest in the Cape City Bowl

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Cape Town’s City Bowl has seen sustained foreign and local investment over the past decade. Despite a slowing property market in other parts of Cape Town, market fundamentals remain good and City Bowl prices have managed to remain resilient.

“Cape Town has long been an attractive destination, particularly for high-net-worth investors from South Africa and abroad,” said RE/MAX Living sales associate, David Spence. “While there is something of a stock surplus in areas such as the CBD, the City Bowl has far less development opportunities, because it is primarily residential, thus keeping the market supply low. The suburbs contained within are in prime locations, being positioned between the ocean and the mountain with close proximity to green belts, schools and transport links, as well as being only a few minutes’ drive from Clifton beaches. Increased demand in what is essentially a land-locked area has consistently kept property values and prices high.”

ST demand is high, competition between investors and first-timersPhoto by Johan Dempers

The demand for low-maintenance, sectional title properties remains high. A significant number of investors aiming to downsize from larger properties are setting their sights on the City Bowl, while a comparatively small number of affluent first-time buyers are also helping to drive demand.

“Sectional title ownership has risen in popularity over the past 10 years,” said Spence. “Issues of affordability for many buyers makes sectional title choices more appealing. Asking prices tend to be proportionately lower for sectional title than freehold ownership, and factors such as security, communal living and fixed monthly costs in the form of levies add to the appeal for buyers looking to downsize.”

This demand is further emphasised by increases in sectional title average sales prices across Vredehoek, Tamboerskloof and Gardens. Gardens has seen the greatest increase in average sales prices for sectional title properties in the City Bowl with 11.2% from July 2017 to 2018. Vredehoek saw average sale price increases in freehold and sectional title properties of 18.7% and 8.8%, respectively.

“Average sales prices improved this year in Vredehoek for freehold and sectional title properties, while Higgovale, Gardens and Tamboerskloof saw increases in sectional title sales prices,” said Spence.

Over the past 12 months, Higgovale has achieved the highest average freehold sales prices in the City Bowl, with Oranjezicht coming in second. Sectional title average sale prices have seen demand for Vredehoek climb.

In terms of total spend over the same period, Oranjezicht saw the highest investment in the City Bowl from buyers, with combined sales of R325m, yet this is down 21.5% compared to combined sales of R414m the previous year.

“This year Cape Town has slipped from a sellers’ to a buyers’ market, with affordability coming into question for a lot of buyers,” said Spence. “Investors will have a little more leverage when it comes to making offers, so sellers must be careful not to push too hard with their asking prices.

“Buyers are going to be more cautious, but sensibly priced homes aligned to market conditions and which present well will continue to gain good returns.”

Here’s what sellers are getting in the City Bowl

Vredehoek

Year Total sales F/hold Avg sale Sec Title sales
July 17 – July 18 66 R7.5m (15) R3.05m (51)
July 16 – July 17 94 R6.1m (33) R2.78m (61)
% increase/decrease 18.7% inc 8.8% inc

Higgovale

Year Total sales F/hold Avg sale Sec title sales
July 17 – July 18 15 R15.8m (8) R7.3m (7)
July 16 – July 17 18 R16.8m (14) R8.6m (4)
 % increase/decrease 5.9% dec 15.1% dec

Tamboerskloof

Year Total sales F/hold Avg sale Sec title sales
July 17 – July 18 37 R9.5m (18) R3.3m (19)
July 16 – July 17 54 R10.6m (29) R3.1m (25)
% increase/decrease 10.4% dec 6.1% inc

Oranjezicht

Year Total sales F/hold Avg sale Sec title sales
July 17 – July 18 49 R10.5m (24) R2.9m (25)
July 16 – July 17 71 R8.5m (33) R3.5m (38)
% increase/decrease 19% inc 17.1 dec

Gardens

Year Total sales F/hold Avg sale Sec title sales
July 17 – July 18 49 R5.4m (10) R3.04m (39)
July 16 – July 17 64 R6.9m (13) R2.7m (51)
% increase/decrease 21.7% dec 11.2% inc
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