12 Nov 2012
Certain areas throughout South Africa have a marked tendency to perform contrary to the property market trends – and show surprising growth when others continue to look fairly lacklustre.
This is according to Tony Clarke, Managing Director of the Rawson Property Group, while John Weston, franchise principal for Rawson Properties Bergvliet/Meadowridge, suburbs sited south of Cape Town, picked up on Clarke’s comment and said his territory is a shining example of one that has been able to buck trends.
Weston says the great challenge his franchise faces is that they never have quite enough stock to meet demand and unlike most big city suburbs, the scenario is in favour of the seller.
Homes priced at R2 million or lower are now snapped up in a few days, he says. One home in Heerengracht Road was launched at R1.895 million and attracted over 30 visitors in a single afternoon. The sale, which was done for cash, was signed up by that night.
“Bergvliet and Meadowridge are being radically transformed. There has been a huge influx of younger buyers and many of these are dedicated renovators, prepared to spend much of their own time and considerable money on modernising and improving homes that are often 40 to 60 years old,” says Weston.
He adds the upgrading usually involves spending R250 000 to R400 000 on improvements, which add excellent value to the property without over capitalising the purchaser’s investment. If this increases the value to ± R2.5 million, Weston says, this is acceptable because the market, up to R3 million, is buoyant.
Typically renovations involve compartmentalised interiors becoming open-plan living, dining and kitchen space and making the home more suitable for indoor/outdoor entertainment. Weston says homes in his area are well suited to upgrading because most of them are well-built and have been well-maintained. In addition, being ‘old style’ Peninsula homes, they have larger-than-average plots, between 850 square metres to 900 square metres in size, which are ideal for young families with children.
When asked what is driving the strong demand in the area, he says one of the prime factors, which may be the most important factor of all, is the quality of the schools in Bergvliet and Meadowridge. Together these house 2 800 pupils from nursery school to Grade 12 and the results achieved by their pupils are good.
So many potential buyers fail to achieve a purchase in Bergvliet/Meadowridge, but Weston has some advice for them.
“In most cases, despite putting in good offers, buyers are “pipped” at the post by others who can pay cash or who have already pre-qualified for the necessary bond and sometimes have written proof thereof," he says. Buyers, whose offers were subject to the sale of their existing property, do not shape in the sub R2 million market as these are snapped up by able purchasers.
“If, therefore, you are serious about buying in our area, the best tactic is to sell your existing home first so that you can come in with a quick, realistic offer.”
Weston adds as is the case where suburbs have become popular, in Bergvliet and Meadowridge rents are now skyrocketing and are perhaps 30 percent up on those of three to four years ago. It is, he says, quite easy to obtain monthly rentals of R12 000 to R15 000 on three or four bedroom homes with a pool and a double garage.
Weston estimated that price appreciation throughout his territory is growing year-by-year and he predicted that this would continue for the foreseeable future.
“The lesson to be learned therefore is that this is the right place to buy, especially now that interest rates are at a 30 year low,” he says.
Those who do buy will see significant growth in the value of their homes in the next five years.
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