Hot Spots in Cape Town Property Market
Rodney Hayter
25 May 2007
IPS is pleased to see two of our recent Cape Town developments, Palm Springs (in Brooklyn) and Crimson Square (in Woodstock), both situated in the suburbs identified as high-growth hot-spots below.
The stellar performance of the Cape Town property market and consequent high prices in recent years may have cooled the ardour of investors - but there are still pockets of high opportunity.
A survey among Chas Everitt International agencies in the Mother City has revealed several areas where agents are confident of solid capital growth.
Dejan Polic, area specialist in Woodstock, says it is one of the anomalies of Cape Town's property scene that one of the prime pieces of real estate should have been relegated to small industry and lower-income housing.
"This gracious 90-year-old neighbourhood is less than 3km from the CBD and deserves the attention of serious property hunters with an eye for a good investment."
Woodstock's fortunes declined with the removal of District Six and the forced relocation of its highly cosmopolitan population. This experiment in social engineering drove a wedge between Woodstock and the city, which led to failing business and a lowering in standards.
"However, in the late Eighties its fortunes started reviving when buyers spotted opportunities for renewal or gentrification of the neighbourhood. In contrast to areas such as De Waterkant and Lower Gardens, where
gentrification percentages stand at 72%, less than 40% of Woodstock properties have been renovated. This creates a gem of an opportunity for investors," Polic says.
The emergence of chic restaurants, pubs and gift shops in the area is proof positive of Woodstock's increasing gentrification and new buyers are predominantly young couples or young families. Polic says most buyers have a
tertiary education, hold a white collar job and earns more than R60 000 a year.
Meanwhile Fanie Lategan of Chas Everitt's Western Seaboard office says yuppies and developers have identified Brooklyn and Rugby as neighbourhoods close to the CBD that are ripe for renewal.
"These areas are slightly further from the city centre than Woodstock - about 10km - but access is still easy because commuters circumvent traffic congestion. They are also close to the ever-popular Blaauwberg area with its superb beaches and restaurants.
"They offers a wide selection of smaller homes, just begging for renovation. Bargain hunters are quick to spot a good buy - a semi-detached home of 101sqm on a 190sqm stand recently sold for R695 000 within four days of listing."
Lategan says there are several older blocks of flats that would benefit from a total revamp and these offer great scope for developers. "Units in new developments sell very quickly and there is strong demand for refurbished
apartments."
Brooklyn has a well-stocked public library, a day hospital, four schools and a retirement home, while a new mosque is under construction. "The infrastructure is in place and property in the neighbourhood is set for capital growth."
Andre de Villiers of Chas Everitt's Southern Suburbs franchise says Maitland is another area that has been overlooked. "Its central position is now starting to attract younger buyers looking for value."
He predicts that prices in Maitland will escalate fast in the years to come. "It is showing all the signs of an area getting ready for a renaissance and offers great value, diversity and development potential. All it needs is
developers with vision - one landmark development is all it will take to galvanise the local property market."
Southfield and Ottery also deserve a closer look from investors. De Villiers says a recent survey showed that the ratio of rental return to capital outlay here was the most profitable in the south peninsula.
In the False Bay area, where De Villiers also has a thriving office, another little property gem has gone unnoticed, he says. "I recommend the Clovelly side of the Fish Hoek valley for those looking for a good buy with plenty of
room for capital growth. False Bay is now getting better rentals than even a year ago. There is a decent selection of properties with good sea views at prices from R1,6m upwards - but they won't be available at those prices a
year from now."
Original article published at www.rodneyhayter.com.
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