"We have returned to the pre-recession situation where activity in the developments market is robust and limited only to the opportunities currently available.
"Developers are demonstrating a strong appetite and proactively looking for new opportunities for development, seeking to achieve prices to attain feasibility given the high costs of development - despite pressure from off-plan buyers who appear keen to meet new benchmark prices. However, while prices of new-build apartments are higher than existing homes, where the demand exceeds the supply buyers show willingness to commit and purchase off-plan, particularly where there is a highly attractive location/lifestyle component. There is also the added spin-off of sound investment potential over the medium to longer term," says Wener.
Hotspots for new residential developments are in the Cape Town city centre, Southern Suburbs such as Claremont and Kenilworth, and the Atlantic Seaboard, including the V&A Waterfront. New residential developments which have met with an enthusiastic market response include Belvedere Court in Claremont, where all 16 units recently sold through Pam Golding Properties (PGP) in just two months, and two new developments in trendy Green Point which also sold out through PGP - the Legacy comprising 53 apartments and 59-unit Odyssey. In addition, the upmarket 22-unit development, The Vantage in Mouille Point, also sold out through PGP. A further successful residential development in Mouille Point is the landmark Amalfi luxury apartment building, which enjoys panoramic views across Table Bay, Green Point Urban Park and Metropolitan Golf Course, Table Mountain and the slopes of Signal Hill.
In The Quadrant, well positioned in the heart of the Claremont business district, the live, work, play concept has seen investors snap up residential units through PGP. Of the 154 units launched by the developer only 21 are now left for purchase at prices starting from R 1.15 million for a one bedroom unit. The final phase of The Quadrant is expected to commence construction in 2015, with a focus on a more mature buyer and including a state-of-the-art rehabilitation and frail care facility. A further 90 apartments, to be marketed on a life rights basis, are also envisioned, including a mix of one, two and three bedroom units.
"Buyers within these developments have already achieved sound capital growth on their investments. At The Quadrant, capital growth of 11% per annum has been achieved over a period of five years, which in real terms translates into gains of 55% on buyers' original investments. The average rand per square metre value also appreciated significantly, improving by 95% from R12,310 to R24,054," concluded Wener.
