Bantry Bay shines on the platinum mile

Bantry Bay’s quotient of Lightstone’s 10 most expensive streets in South Africa has risen from one in 2014 to three in 2015, which is understandable if you look at the rate of development and return on investment (ROI) the suburb offers.

That’s the word from Lew Geffen Sotheby’s International Realty agent, Fran Segal, who says: “When you measure the percentage of ROI, it’s easy to see why this sought-after suburb now features so prominently.

“Since the beginning of 2010 a total of 124 houses were sold worth a combined R1.615 billion and 314 apartment sales fetched R1.622bn with total sales for this period realising a hefty combined sales value of R3.237bn.

“Measured during 2015, the average percentage ROI for houses in Bantry Bay was a nominal 16 percent a year over eight years, which is an excellent return by any standard. Five houses were sold in this exclusive enclave last year, with their individual percent ROI varying between a solid 11 percent and a phenomenal 22 percent.”

In Lightstone’s 2014 report published in July last year, only De Wet Road made the cut into the top 10, but this year it was joined by Arcadia and Ravine roads which placed seventh at R22.25m, ninth at R20.975m and tenth at R20.675m.

Lightstone determines the highest valued roads selecting those with the highest median rand value rather than the mean value, as it eliminates extreme values which can influence the mean of a street. This therefore gives a good representation of the value of a street as a whole.

To calculate the value of the streets, Lightstone uses a valuation model based on repeat sales and comparable sales which takes inflation indices and applies them to a property’s previous sale price to bring the historic purchase price to current value.

Lara Kaplan of Lew Geffen Sotheby’s International Realty says: “For many years Bantry Bay was overshadowed by Clifton, and more recently by Fresnaye, when it came to market performance, but this has changed dramatically over the past two to three years.

“Deeds office figures from the beginning of January last year to date reveal that, alongside Bakoven, Bantry Bay achieved the highest average rand values for houses above R20m on the Atlantic seaboard during this period with six houses selling at an average price of R27.4m while eight houses in Bakoven were sold for an average of R27.8m.

“However, two unregistered sales in Bantry Bay of R48m and R34m during December and February will push the suburb into pole position with the average price increasing to around R30m.”

During the same period, three house sales in Fresnaye achieved an average sale price of R26.6m, followed by Camps Bay with five sales for R23.7m and Clifton with R21.5m for two sales.

Segal says: “According to Lightstone, the highest rand values achieved for house sales during 2015 were in Victoria Road at R35m, De Wet Road and Arcadia Road both at R29m and Ravine Road at R26.5m.

“They have also determined that only 21 percent (307 units) of the properties in Bantry Bay are single title houses compared to 1 178 sectional title units – with most in the luxury apartment blocks on the seaside of Victoria Road with panoramic sea views.”

Lew Geffen Sotheby’s International Realty Atlantic seaboard and City Bowl chief executive, Brendan Miller says: “Deeds Office records show that Bantry Bay has increasingly dominated this market in the blue chip segment of the Atlantic seaboard since 2010 with a 30 percent market share and 314 apartment sales to date achieving a combined value of R1.6bn.

“It’s closely followed by Clifton where 143 sales realised R1.3bn and Camps Bay at 222 sales fetching R1.045bn during the same period.”

Luxury apartments in Bantry Bay have proven to be an excellent investment and, measured in 2015 they outperformed houses with a nominal 18 percent ROI a year over eight years.

According to Miller, the suburb’s exponential market growth in recent years is especially evident when measured over the last six years.

“The Bantry Bay apartment market performed brilliantly during this period with the highest average nominal  ROI of 21 percent, followed by Camps Bay with 16 percent.”

Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty says: “With entry level prices now starting at around R10m, buyers looking for value won’t find it in low prices but rather in the return on investment, especially if they are lucky enough to buy one of the original houses.

“This is where the true value lies for astute investors as a clever rebuild or revamp can bump up the value exponentially, realising hefty returns in a short time.”

However, such gems don’t often come onto the market considering that 55 percent of homeowners in Bantry Bay have owned their properties for 11 years or longer and 37 percent of the owners are pensioners.

Even though the market has stabilised in recent months due to the political turmoil and low rand, Geffen doesn’t foresee the suburb’s market strength waning soon.

“Overall, the Atlantic seaboard is very much at odds with the rest of South Africa in that the market is far less dependent on interest rate fluctuations and is regarded as one of the most stable residential markets in Cape Town.

“Bantry Bay’s prime wind-free position against the mountainside, spectacular views and its proximity to top class amenities will cushion this exclusive market even further.”