Words: Kit Heathcock Images: Supplied & Shutterstock
The current economic climate has seen a turnaround in the Cape Town property market. We’re accustomed to seeing the glamorous suburbs of the Atlantic Seaboard and the more exclusive of the Southern Suburbs making headlines with record-breaking sales, but now growth in those areas has slowed and others are taking their turn in the spotlight.
“Generally, suburbs experiencing price growth are those that offer a variety of amenities, are close to places of work or entertainment, or major transport routes,” says Sandra Gordon, research and market analyst, Pam Golding Properties. “With rising inflation, fuel costs and other economic challenges, affordability has become an increasingly important factor in the property market. This means that activity tends to be more robust at the lower ends of the market.”
Looking at the Lightstone property data for 2018, she identifies the overall top-performing suburbs in terms of house price growth, across all price bands, as Blue Downs (170%), Atlantis (153%), the Waterfront (50,6%) and Mouille Point (52,4%), with Kalk Bay, Kuils River and Century City also registering significant median price growth.
Volume of sales
Another measure of performance is volume of sales. Arnold Maritz, Southern Suburbs co-principal, Lew Geffen Sotheby’s International Realty, notes that Propstats data shows sales numbers dropping by 27% across the Cape Peninsula last year. “The highest reduction in volumes of sales and turnover seemed to be in the areas of Cape Town where the median prices were higher. Areas such as False Bay, the South Eastern Suburbs and the Western Seaboard seemed to be slightly less affected than the Atlantic Seaboard, City Bowl and Constantiaberg areas, but none were unscathed.” He cites Plumstead, Harfield Village, and Rondebosch as least affected, and observes that in Plumstead, Observatory, Tokai and Rondebosch, average sale prices increased by 15,8%, 13%, 10% and 7,4% respectively.
RE/MAX has seen a similar pattern of more affordable suburbs coming to he fore, says Adrian Goslett, regional director and CEO. “According to our own statistics for the year, the highest number of registered sales completed in 2018 were recorded in and around the suburbs of Table View, Somerset West, and Mitchells Plain, followed by suburbs such as Gardens and Claremont.”
Online property portal Private Property shows areas with a median price of under R1m such as the Cape Flats and Eersterivier topping the list of most in demand suburbs in 2018 (based on views per listing), as they did the previous year. Areas that have significantly moved up the list since 2017 include Plumstead, Edgemead, Uitzicht in Durbanville, and Muizenberg with median prices of between R1,5m and R2,35m.
A variety of reasons are behind the performance of the better performing suburbs: “Harfield Village, like Plumstead and Rondebosch, simply offered better value for money than the suburbs immediately surrounding them, and consequently attracted more of the qualified buyers in those respective price ranges,” says Maritz. “Suburbs like Observatory are undergoing urban renewal, and that, together with new developments in the area, contribute to the price growth in that suburb.”
Goslett says, “Price growth in the Table View area can be attributed to the ongoing development in the area, from the addition of the MyCiti bus route and the new Table Bay Mall, to the multitude of sectional title developments that have popped up over the years. All of this has seen demand grow in this suburb – a trend that I predict will continue well into 2019 and beyond.” He adds that Somerset West has seen a comparable growth curve and steadily growing in popularity.
Top of the market
When it comes to the top end of the market it’s not all bad news. “There are still some areas where high-end properties remain sought after,” says Gordon. “The Waterfront continues to perform as the appetite for luxury apartment living near to the coast shows no sign of abating.”
The two highest-priced properties that sold in Constantia last year were significantly more expensive than the two highest priced properties sold there in 2017, according to Maritz. “Sellers in more affluent areas are potentially less likely to accept low offers while the general market is in a ‘holding pattern’,” he says, “and are able to afford to hold out for the market to return to a stronger growth phase.”
Owing to the escalation of prices in suburbs such as the Atlantic Seaboard and CBD, more affordable and newly developing suburbs somewhat further removed from the centre of town are growing in popularity
Adrian Goslett, regional director and CEO, RE/MAX of Southern Africa
Top-performing suburbs in price increases*
- Blue Downs
- Kuils River
R1,5m to R3m
R3m to R6m
- Mouille Point
- Dennendal, Tokai
- Kalk Bay
*Source: Sandra Gordon, Pam Golding Properties, from Lightstone data