The Cape Town sectional title sector is not only peaking with excessive demand and a shortage of stock, but prices are edging ever higher with the rates paid per square metre on the Atlantic Seaboard for example now exceeding those of top end freehold homes.
Chairman of the Seeff group, Samuel Seeff says that although sectional title property only comprise just under 23% (about 51 933 units) of the total number of title deeds registered for the Cape metro as a whole, it comprises 40% of all sales annually, such is the demand.
While, according to the latest Lightstone data, the number of units transacted across the metro for last year of 4 398 was only marginally more than in the preceding year, the total value of just over R7.253bn was 20% more.
Almost half of the value comes from the Atlantic Seaboard (about R2.6bn) and City Bowl/CBD (R1.1bn) followed by the Southern Suburbs at about R750 million and greater Blouberg and Parklands area at R670m.
The average price of sectional title property of R1.65m for the metro as a whole is not only 18% more than the R1.4m of 2013, but now closely rivals the freehold price of R1.67 million. Meanwhile the average sectional title price for the Johannesburg metro is at around R800 000, half of that of Cape Town.
The demand for Cape Town Property is being driven by a range of factors, says Seeff. Top of the list, a desirable location with areas close to transport and business nodes such as the CBD and Southern Suburbs and seaside locations such as the Atlantic Seaboard and Blouberg ranking amongst the most sought-after areas. Other high demand areas include Century City, the Tygervalley Waterfront and various hot spots across the northern suburbs.
On the Atlantic Seaboard and in the CBD, sectional title sales account for about two-thirds of annual sales according to Ian Slot, Seeff’s managing director for the areas.
The number of units sold in the CBD rose last year by 32% (221 versus 168) over the preceding year while the average sales price increased by 18% from R1.4m to R1.65m and by 19% from R3.6m to R4.3m across the Atlantic Seaboard.
Based on Propstats data, the average selling price of sectional title properties in the suburbs of the Atlantic Seaboard outranks the average price of most suburbs across the city.
In the CBD for example, it sits at around R1.9m while Green Point and Sea Point is at around R3.4m and Mouille Point at about R4.5m. In Bantry Bay, Fresnaye and Camps Bay the average ranges upwards of R6.5m to about R12m in Clifton.
Over the last year, apartments have sold for up to R32m at the V&A Waterfront and as much as R42.5 million on the Atlantic Seaboard (in Bantry Bay), both sold by Seeff. Clifton tops the list for the most expensive with apartments on the seaside of Victoria Road now easily selling for over R100 000/sqm.
At the V&A Waterfront Marina, apartments now sell for up to R67 475/sqm (incl. VAT) on the canals and R71 946/sqm on the FYB (Front Yacht Basin) based on the two most recent sales made by Seeff.
Nearby, at “The Water Club”, an exclusive ocean front development with a yacht bay located in Mouille Point, there is just about nothing up for sale and the less than a handful of units that sold last year reached prices of up to R84 609/sqm.
Another hot spot, the Southern Suburbs’ neighbourhoods of Rondebosch, Newlands, Claremont and Kenilworth too is seeing huge demand and critical stock shortages according to agents, Sean Guy and Belinda Keys. Units are consequently selling almost as soon as they come onto the market and attracting top prices.
Kenilworth apartments for example now sell for R1.2m on average, about R16 000 to R20 000/sqm. Rondebosch and Claremont units go for about R1.5m and upwards of R22 000/sqm to as much as R34 000/sqm. Newlands apartments sell for a similar rate per square metre, but a higher average price of around R2.5m.
Another hotspot is the greater Blouberg area, from Parklands and Table View to the seaside suburbs of Big Bay, West Beach and Bloubergrant. Here especially, there are severe stock shortages according to Wouter Pentz, licensee for the area.
Of the total value of sales recorded by Propstats for the last year of around R2.395bn, about a third relates to sectional title property. Century City now boasts an average selling price of just under R1.8m, about R16 000 to R24 000/sqm.
At Big Bay, that includes several exclusive seaside sectional title complexes including the sought-after Eden on the Bay, the average price is now around R1.5m, about R14 000 to R38 000/sqm.
Suburbs on the sea-side of the R27, most notably Bloubergrant with its mix of sea facing units now sell for an average of around R1.5m at about R24 000/sqm at the top end.
The more affordable Bloubergsands and Parklands still offer an average price of about R600 000, about R8 000 to R23 000/sqm. Table View boasts a similar rate per square metre, but a higher average of around R1m.
The agents agree that the massive demand is driven by two key factors, security and lifestyle. Busy lives and traffic congestion means that buyers are looking to save on maintenance and commuting. At the same time, they also want to live close to leisure hot spots and top beaches.
For this reason, the sectional title sector also has strong investment appeal with the demand for rental accommodation outstripping supply in the hot spots. Rental rates on the Atlantic Seaboard for example is edging ever higher with flats now easily fetching R25 000-R45 000 per month in Sea Point and Mouille Point and up to R60 000 to R80 000 in Clifton, Bantry Bay, Fresnaye and Camps Bay.