Property prices in Cape Town’s city centre levelling out
Over the past few years, as Cape Town experienced an unprecedented rise in residential property values throughout the metropole, the Cape Town city centre was understandably seen to be a strong investors market, with new developments quickly selling off-plan at record prices.
Sold at averages of around R19 229 per square metre in 2014, prices during 2017 topped out at R41 287 per square metre. However, the latest edition of The State of Cape Town Central City Report - 2018: A year in review has revealed a drop back down to an average of R35 431 per square metre - similar to levels last seen in 2016.
This, according to Rob Kane, chairperson of the Cape Town Central City Improvement District (CCID), the organisation that publishes the report, is very good news for the CBD and surrounds.
“In 2017, the median apartment price sold in the city centre was around R2 million. This saw a small increase to R2.1 million in 2018, showing a slowdown on the previous trend of high and quick year-on-year property price increases,” says Kane.
Eight of Gauteng's 'hottest' property investment areas
Have you ever looked at an area wishing that you had invested in its property market five years ago when property was more affordable? Unfortunately it is not always possible to see the immediate potential of an area, but many suburbs in Gauteng are proving that they were worth considering.
Below Seeff’s experts elaborate on the areas that were good investment spots a couple of years ago and name the suburbs they believe are hot property now:
Charles Vining, Seeff’s MD in Sandton, says while many suburbs in Sandton stand the test of time and are good for property investments because of their accessibility to the Sandton CBD, Illovo and Fourways are two standout suburbs.
While the median price of a sectional title apartment in Illovo was R850 000 in 2009, this price has doubled in 10 years. The median price currently is R1.65 million - taking one, two and three bedroom properties into account, says Vining.
When are new developments good or bad for your property’s value?
Densification has become an unpopular word in Western Cape suburbia, with a recent relaxation of rezoning and subdivision policies spurring an already active property development sector. While few can deny the desperate need for more homes in land scarce and ever-expanding Cape Town, property owners are justifiably concerned about the effect shrinking plot sizes and increasing traffic congestion will have on their property values and lifestyles.
According to Schalk van der Merwe, franchisee for the Rawson Properties Helderberg Group, development doesn’t always spell disaster for residential suburbs. In fact, many neighbourhoods are benefitting significantly from new projects within their borders, experiencing both a rise property values and an increase in the availability of local amenities and conveniences.
Van der Merwe says it’s natural for homeowners to be wary of new subdivisions or rezonings in their area, but interest from builders or developers is actually a very good sign for a suburb. It indicates high property demand, low existing supply and a willingness from buyers to spend a little more to live where you do.
Landlords, here’s how to spot a ‘bad’ tenant
In today’s economic climate, wasting time, energy and money on a tenant that will default on payments or stop paying completely is just not an option.
And yet, in Q1 2019, almost 40% of tenancy applications were classified as either ‘high risk’ or ‘very high risk’, according to the PayProp Rental Index, a statistical analysis of the South African residential rental sector.
“This just shows again how important it is to properly assess tenants through credit checks and other means before placing them in a property you either own or manage,” says Johette Smuts from PayProp, national processor of residential letting transactions.
Smuts outlines 3 ways to spot a bad tenant to help rental agencies and landlords place better tenants: