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Apartment living in Cape Town’s CBD

18 Mar 2015

The much publicised stock shortages in the City Bowl are especially prevalent insofar as the availability of flats in the CBD is concerned.

This apartment offers two bedrooms, two bathrooms, an entertainment balcony, views of the city and Table Mountain, and parking for two cars. It is on the market for R2.995 million – click here to view.

This is according to Seeff’s agents, Warren Emett and Jason Paans, who say demand is at a historic high, higher even than during the pre-2007/8 boom.

Buyers are literally ready to put in offers as soon as new listings come onto the market. To illustrate, Seeff recently took four offers on three two-bedroom apartments in the Perspectives Building on Roeland Street and sold all three within one hour.

One unit sold for the full asking price of R1.35 million, the second for R1.2 million, slightly above the asking price of R1.195 million and the third for R1.45 million, just below the asking price of R1.495 million.

The picture is similar for sectional title property in other areas of the City Bowl, where agents report that well-priced units are selling almost as fast as they are coming onto the market.

This 83sqm apartment has one bedroom, one bathroom, and offers 5 star amenities. It is currently priced at R3.7 million – click here to view.

This is quite remarkable considering that there was almost no market here five years ago, say the agents. With about 6 000 people now calling the CBD home, up from around 750 a decade ago, according to the latest data from the CCID, it is no surprise that demand is now considerably outstripping supply.

The sales growth over the last three years also bears out the demand. In 2012, 117 sales to the total value of just under R153 million were recorded for the CBD. In 2013, this increased to about 174 sales worth just under R250 million; about 49% in terms of unit sales and 63% in rand-value. Last year, this increased further to 226 sales to the value of just over R400 million, exceeding the activity of the previous year by 30% in unit and 60% in value terms.

At the same time, the average price is up by 29% year-on-year, from R1.4 million to around R1.8 million.

This apartment offers 83sqm of floor space, one bedroom, one bathroom, and 5 star amenities. It is on the market for R3.55 million – click here to view.

While the bulk of the sales still fall below the R3 million price mark, it is notable that about 17 top-end sales were recorded last year at prices ranging to around R9 million for an apartment at 15 on Orange.

Where the rate per square metre averaged at around R14 000 a few years ago, it now comfortably tops R20 000 ranging to around R24 674 per sqm for a 43sqm unit at Greenmarket Place to a top-end price of R43 062 per sqm for a 209sqm unit at 15 on Orange. Sales at the Icon clocked in at up to R26 705 per sqm for a 44sqm unit and R32 500 for a 40sqm unit. Harbour Bridge reached R28 125 for a 64sqm unit and R33 158 for a 95sqm unit.

Property prices now start at just under R1 million for a bachelor pad. One bedroom apartments range upwards of R1 million for an older unit and about R1.5 million for a modern flat. Two bedroom apartments range upwards of about R1.5 million for an older flat and upwards of around R2.2 million for a modern, trendy apartment.

The demand for rental accommodation also remains strong to the extent that tenants now pay upwards of R8 000 to as much as R20 000 per month for a city flat.

Emett and Paans say for residents, the CBD is the ultimate live, play and work neighbourhood and, in terms of convenience, few areas compare. The location is tops. With Table Mountain as a backdrop and the harbour and ocean towards the front, it sure beats the location of most CBDs and, best of all, there is free WiFi across the city.

According to Ian Slot, Seeff’s managing director for the Atlantic Seaboard and City Bowl area, it took vision for investors to redevelop older buildings, and after an initial slow start, demand now exceeds supply by quite a margin, opening up further development opportunity; converting the older C-grade office buildings into residential and mixed-use complexes for example.

Having said this, there are a number of vital aspects that should be taken into account such as the traffic congestion. Greening is also vital, something that could be achieved by taking parking underground and developing green parks on top. So too the ongoing management of the safety and security of residents and visitors given that this is a tourist hotspot.

The location and limited land space will always drive demand and values ever higher, says Slot. Everybody now wants to live in and around the CBD and Atlantic Seaboard. The vibe is quite unmatched anywhere in the country - street cafes, trendy bars, theatres, the V&A Waterfront, the beaches and it is of course close to work for many, most in fact now choose to go car-less and either cycle or walk everywhere.

Buyers across the board are attracted to the area, from those looking to actually reside in the CBD on a permanent basis to holiday home buyers. It is also an investment hotspot given the high demand and consequently good rental returns that the CBD offers.

The CBD was also a top foreign buyer hotspot over the last year, with about 37 apartments worth almost R74 million snapped up by buyers from across the globe; from as far afield as China to Germany and USA investing here.

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