Buy-to-let Fever in Fish Hoek

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10 Sep 2010

Cape Town’s Fish Hoek is experiencing ballooning demand for properties prices between R600k and R800k and then also in the upper ranges over R2,5m.

 

 

 

And there is a large gap in the market for buy-to-let investors looking for fairly priced properties and good tenant demand.

So says Francois do Toit, marketing manager for Seeff in the area, who adds that “from a marketing perspective, 2010 has been one of the best years ever in Fish Hoek”.

“Our sales are up by 20% to 25% on 2009 and if a property is priced right, it will sell within two to three weeks.”

He says investors are returning on a large scale to the market and this explains the swelling number of sales at the lower end. “I’d say around 70% of the sales occurring in this bracket are comprised of investors. The main reason for this is that investors are seeing good rental returns on their investments and find this option increasingly attractive.

“In terms of the rest of the properties selling in the area, the buyer profile is more general. We have young buyers with babies purchasing their first properties whilst we’re also seeing plenty upcountry people buying for investment and leisure properties.”

Sandi Gildenhuys, Pam Golding Properties’ (PGP) area manager for the South Peninsula, says there is demand in the price ranges between R850k to R2,5m and there is a shortage of properties to rent. “Our buyers are 95% local – existing Cape Town residents.”

She says the attraction of the area is bolstered by the fact that in Fish Hoek, people can buy a coastal property with mountain and sea views that is affordable, close to shops, schools and warm water beaches.”

She says properties can take “anything from a week to a year to sell”. “It depends on how realistic the pricing is, as well as the location of the property.”

Du Toit and Gildenhuys agree that price growth in the area has been low.

“It is still very much a buyer’s market with growth going sideways in most cases and a mere 1%-2% recorded in others,” says Du Toit.

Leon Bosman from Rawson Properties’ Fish Hoek franchise says sales in Fish Hoek are rising steadily and according to the SAPTG in March to May were over R25m. “In that same period we sold R8,28m worth of property in our territory, which now includes Simons Town, and we expect to increase this exponentially as historically the market tends to improve during spring and summer months."

Bosman says Fish Hoek is still very reasonably priced, with the average home going for approximately R1,2m, which is some 50% below that of similar middle class homes in the Greater Cape Town area and possibly 200% lower than those of homes in the really affluent areas.

"This affordability makes Fish Hoek very attractive to many of the younger couples and those who are levelling off in their careers or retiring.

"It is still possible in Fish Hoek and surrounding areas to buy a well-appointed three or four bedroom home for between R950k and R1,4m.

"On such homes we regularly achieve rentals of between R5k and R9k per month."

Bosman said that some idea of the growing appeal of Fish Hoek can be gained from the fact that the website for property in the area recently had 1,505 hits in 60 days, of which one-third were for rentals.

"There can be no doubt that this is a future growth point in which prices could be 15% up by the end of 2011 - but at the moment the prices are very competitive and ideally suited to the tougher credit restrictions of the post-National Credit Act (NCA) era," said Bosman. – Eugene Brink

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