Robust Price Growth in City Bowl

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11 Aug 2010

All areas in Cape Town’s City Bowl have shown continued increases in average nominal house price growth over the past 3-5 years.

Statistics by Seeff showed that when looking at the period between 2005 and 2009, average growth rates per area were 15,5% for Zonnebloem, 14,5% for the Bo-Kaap, 11,8% for Vredehoek, 10,8% for Gardens and 9,5% for Tamboerskloof as well as Oranjezicht.

The three-year average growth for the area was 11,8%. When spanned over five years, this figure jumps to 17%.

Top of the ranks again is Zonnebloem (25,9%), followed by Bo Kaap (17,1%), Oranjezicht (16,3%), Gardens (15,5%), Vredehoek (14,1%) and Tamboerskloof (13,6%).

The statistics showed in the first quarter of 2010 that there has been quite a bit of movement in all price bands in the City Bowl, with 38 properties sold and registered to the value of R165,902m. The average price for a house in the City Bowl area now stands at a robust R4,365 842.

For the individual price bands, the figures showed that 14 sales between R500k to R2,5m were recorded at an average price of R2,058,357. In the price band R2,5m-R10m there were 21 sales (55,26% of all the transactions) at an average price of R3,908,810 (highest priced sale R8,5m). Between R10 and R30m there were three sales at an average price of R18,333,333 (the highest price of one unit was R21m).

The three highest priced houses that were sold were two in Higgovale at R16m and R21m, and one in Oranjezicht at R18m. The most active area within the City Bowl was Oranjezicht with 12 transactions at R62,575m. For the first quarter of 2010 average house prices were R2,89m for Devils Peak, R1,77m for Gardens, R18,5m (top end) and R5,2m (middle lower) for Higgovale, R4,1m for Oranjezicht, R3,1m for Tamboerskloof and R2,43m for Vredehoek.

Susan Litten, one of Seeff’s specialists for the City Bowl, explains the attraction that is driving this growth. “As the traffic into the city gets worse, the appeal of areas that may have been previously overlooked increases,” says Susan Litten, one of Seeff’s specialists for the City Bowl.

Tony Bredenkamp, manager for Greeff Properties in the City Bowl, says most of the demand in the City Bowl is in the R600k to R1,9m market. “Some far higher prices in Oranjezicht and Higgovale have been achieved, with the top selling price being a sale of R16,5m. Sales are taking an average of 65 days.”

He says in Clifton, Fresnaye and Bantry Bay, sales take longer. “The prices achieved range from R5m to R60m.”

Seeff’s other specialists in the area – Michael Hauser, Anke Menelaou and Doris Ricketts – have compared sales there for June 2009 against June 2010. These showed that whereas houses in City Bowl were listed for an average of 143 days last year and the difference between listed price and sales price was 15%, this year the average listing duration is down to 95 days with an average drop in asking price of 10%. “For April/May 2009 versus April/May 2010, listing duration was down from 125 days to 70 days.”

“Tamboerskloof is well known for the community involvement in a very successful Neighbourhood Watch and proximity to the Deutsche Internationale Schule Kapstadt. This makes it the first choice for German-speaking clients. The area is embraced by Lions Head and Signal Hill, and the roads closest to Lions Head are as sheltered from the wind as is Higgovale,” says Menelaou.

“Oranjezicht is a leafy suburb with the most popular streets referred to in general terms as ‘The Avenues,’ situated above the Molteno Reservoir. The vistas across the City Bowl and harbour are spectacular. Traditional Victorian and Edwardian architecture remains popular with purchasers, but more and more ultra-modern homes are starting to take the place of older homes that are being demolished.

“Since these areas are still less pricey than Camps Bay, Clifton and Fresnaye, the last two years have seen interest from buyers who would not previously have considered these areas. The world-class St Cyprians Private School for girls is also situated in Oranjezicht, and has definitely proven to be a huge drawcard, while the top Afrikaans School Jan Van Riebeeck also attracts many buyers to Tamboerskloof, Oranjezicht and Higgovale.”

Ian Slot, MD of Seeff Atlantic Seaboard, V&A Waterfront, City Bowl and CBD, says the City Bowl enjoys the proximity to Cape Town’s CBD and Atlantic Seaboard, beautiful mountain views as well as the rich architectural building styles and excellent schools nearby.

“It is understandably very popular. The City Bowl offers very well-priced houses. The high demand for houses here also reflects in the return on investment, with the growth rate for the City Bowl for that past 5 years a solid 15% year-on-year (y/y) for an average house price of R4,365m.” – Eugene Brink

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