19 Apr 2013
Property prices in Cape Town’s northern suburbs are showing positive capital growth for the first time since 2008.
This is according to Etienne Labuschagne, principal of Harcourts Select, who says house prices in areas such as Bellville, Durbanville, Brackenfell, Kuils River, Parow and Kraaifontein are showing growth of 5 percent year-on-year. He attributes this to a number of factors, not least of all that the recession is receding, a belief supported by the fact that his company doubled its 2011 sales volumes last year.
However, he says buyers are still price conscious and affordability remains fundamental to continued market momentum. This is one of the reasons for the growing popularity of the area, which he says offers better brick-and-mortar value for money than its southern counterpart.
Labuschagne says consumer price-shyness has put the northern suburbs into the Western Cape’s real estate spotlight, due to its competitively priced offerings. He says on average, properties in the northern suburbs are 20 percent less expensive than those in the south. A two bedroom apartment can be bought for R450 000 in Parow while the same flat on the southern side of Century City, which divides the two areas, would cost R550 000. Similarly, he says a three bedroom family home in Oakdale, Bellville will cost on average about R1 million, whereas in the southern suburbs you’ll struggle to find anything for under R1.3 million. "Even our mansions, which have price tags of up to R30 million, offer better value per square metre.”
The second local market driver is lifestyle quality. Today’s buyers are increasingly aware of the link between location and capital growth, he says. Buyers are looking further into the future than previous generations did and making well calculated buying decisions with the focus on lifestyle combined with value growth. Labuschagne says the northern suburbs, which fall under the City of Cape Town municipality, are conveniently located within a 25 to 35 kilometre range of the city centre and close to highways and the airport. However, they offer a tranquil, more natural alternative to commercialised big city living.
The growing popularity is further underlined by a high rate of new development, particularly on the north eastern side. Labuschagne expects this “north east growth corridor” to be fully developed within the next 10 to 15 years because it’s the last vacant land in the greater Metropole. “Everywhere else is bordered by the sea or agricultural land so there is nowhere else to go but here,” he explains.
As a result, suburbs such as Kraaifontein, which sits at the entrance to a number of wine routes, have become hubs of new building activity such as the R1.5 billion Buh-Rein lifestyle estate. Spread out over 87 hectares of reclaimed land, the estate will, on completion, have more than 3 200 apartments, 133 freestanding homes and 137 townhouses as well as a shopping centre, school, medical centre, petrol station, sports field and 20 kilometres of cycling and running paths. Priced from R450 000 to around R1.5 million, its residential units are selling quickly, which Labuschagne attributes to its entry level and middle class affordability as well as its focus on healthy outdoor living.
He says there is a positive feeling in the market place at the moment, due to the banks granting loans more easily, which is why properties, particularly those in the lower to middle price ranges, should sell within the first month of listing. Labuschagne says that the buyers are out there, so if a home isn’t selling, it’s because of a lack of area knowledge and marketing skills by the listing agent, or it’s over-priced.
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