Property demand in CT Southern Suburbs increases

Image source: www.rondebosch.com

“While many areas throughout the country have seen a slow-down in buyer activity, the Southern Suburbs have bucked trends with demand on the increase. Demand for investment property has been particularly strong, especially sectional title units located in Kenilworth, Claremont, Newlands and Rondebosch. This is mainly due to the fact that properties within these areas offer good yields, as they are centrally located and sought-after among students and younger generation home buyers,” says Jacobs.

He adds that another reason why the Southern Suburbs have seen an increase in buyer activity is that there are a number of new developments that have recently become available. “We have seen a trend of investors purchasing freestanding homes that are situated on larger stands with the view of developing the property into smaller sectional title scheme units.

Freestanding family homes

It is not only the sectional title units that are selling well. According to Jacobs, there has also been an increase in the number of buyers wanting to purchase larger residential freestanding family homes. He notes that homes that are correctly priced between the R5m and R7m mark are selling relatively quickly. Homes priced correctly below R3m are highly sought-after, often selling within days of being listed on the market.

According to Jacobs, while local buyers still make up the majority of consumers purchasing property in the Southern Suburbs, there has been a marked increase in the number of buyers who are relocating from Johannesburg, Durban and Port Elizabeth.

“Buyers are drawn to the Southern Suburbs because of large array of excellent amenities on offer, such as good schools, universities, hospitals, shopping centres and businesses. Many people are looking to relocate the area because it is centrally located and has easy access to both Cape Town’s CBD and the Southern Peninsula. Southern Suburbs residents can easily commute into the centre of town for business or hit the beach on the weekends – nothing is too far,” says Jacobs. “Rondebosch East has seen an increase in demand among the Muslim community who are looking for property close to the local mosques. A trend among the community is to purchase properties that are redeveloped into multi-storey luxury homes."

Negative impact of overpricing

Jacobs says that the only properties in the Southern Suburbs that are not selling well are those that are perceived to be overpriced. “Listing a property at the correct price cannot be overemphasised. A trend that we have seen is that these specific properties are listed with more than three agencies, the agent commission is usually low and the properties sometimes take up to six months or more to sell, and normally at prices that are substantially less than original asking. In some severe cases, the property can sell for less than its actual value, which is mainly due to buyers and agents developing a negative perception about the property over a period of time,” says Jacobs.

Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, says that when a property has been on the market for some time it gets a negative stigma attached to it, the seller appears desperate to sell with the perception being that there is something wrong with the property.

“Correctly-priced homes are selling and selling well in the Southern Suburbs. Homeowners who are looking to sell their property will be able to take advantage of the upward tick of buyer activity in the area, provided they list their home at fair-market value,” Jacobs concludes.