It's a case of you snooze, you lose

Cape Town's economy is flourishing under investor confidence that is attracting multibillion rand investments and pushing the province to consistently outperform national GDP growth, but the widening disparity between the local and national economies is not without its drawbacks, especially in the strident property sector. Lew Geffen, chairman of Lew Geffen Sotheby's International Realty says: "Surging property values spurred by the growing demand from upcountry residents moving to Cape Town has driven up prices and has also precipitated a severe shortage of affordable entry level homes, especially in soughtafter areas like the southern suburbs. "Steep price increases during the past five years have significantly raised the entry level point in this popular district with entry level prices in suburbs like Rondebosch and Claremont now on a par with midlevel price bands in many.comparative neighbourhoods in other metros. "Houses in the R1.5 million to R2.5m bracket and apartments for less than R1.5m have become rare.commodities and when they do.come on to the market they are often snapped up within hours." Megan Milne, candidate agent for Lew Geffen Sotheby's International Realty in Rondebosch, says there are occasionally still flats to be found in the Rim to R1.5m price band but they are usually in older blocks and barely hit the market before being snapped up, sometimes even the same day "This is especially true if they fall within the university catchment areas and near the Jammie shuttle route as there is a serious shortage of student accommodation. "Parents who live in Durban or Johannesburg are aware of the demand for these apartments and sometimes place offers even before seeing them as they know from experience that in the time it takes them to fly to Cape Town for a viewing, the apartment is likely to be sold." Milne says there is also a huge demand for sectional title units in modern.complexes that offer 24hour security as well as safe offstreet parking. "These two criteria top the list for many of my clients and buyers will often increase the amount they are willing to pay if the apartment includes a garage or a parking bay" Tina Malyon of Lew Geffen Sotheby's in Mowbray and Rosebank says that although these suburbs still offer good value.compared to their pricier neighbours, it is very rare to find a house in Rosebank for less than R3.5m and in Mowbray house prices now start at R2.6m. "It is.common for wellpriced homes to sell within a week and I have a growing waiting list of buyers who lost out on these quick sales. Instead of show days on Sundays I now have mini show days during the week between 2pm and 5pm which attract the serious buyers and who very often put in offers immediately" Dave Burger of Lew Geffen Sotheby's in Kenilworth and Harfield Village says that since the beginning of the year, stock has become much harder to source and they now have a waiting list of buyers. "The problem is also exacerbated by sellers who are holding out for unrealistic prices because they are buying other properties in more expensive areas." Burger says the growing demand has spurred new development in the area and two new sectional title developments are under construction. Wynberg has long been popular with first time buyers as its wide range of properties has always included accessibly priced entry level houses, but agent Jennifer Rogers says there are now far fewer options. "Occasionally houses for under R2m do still.come on to the market, but these are.compact twobedroom character cottages which are ideal for young professionals but often too small for growing families." However, buyers who are willing to look a little further afield still have a small but shrinking window of opportunity to buy a family home for under R2m without a bun fight on the first day of its release. Steve Thomas, the franchise manager for Lew Geffen Sotheby's International Realty in False Bay and Noordhoek, says that False Bay Fish Hoek and Noordhoek properties tend to be more affordable at familysize entry level than most other suburbs in Cape Town's south. "Pin apartment in Wynberg or Plumstead that needs refurbishment and is on the market for around R1.2m to R1.3m will sell within a matter of hours at the moment it's definitely a flipping market. But if you're looking for somewhere to live, Fish Hoek offers similar properties for less than Rim and it's still possible to buy a three bedroom house for between R1.9m and R2.4m, but you do need to be on your toes here as well, because while they may not sell within hours we'll usually take offers within a week." Steep price increases during the past five years have significantly raised the entry level point for homes in the southern suburbs Sellers in Kenilworth and Harfield Village are holding out for unrealistic prices because they are buying in more expensive areas. Prices on the rise in Rondebosch CITING Lightstone data, Lew Geffen, chairman of Lew Geffen Sotheby's International Realty, says the southern suburbs have experienced steady yearonyear growth from 2010. "In Rondebosch, for example, at the end of 2010 the average house price was R2.6m, but after a solid 9 percent nominal growth a year over two years the price jumped to R3.3m by the end of 2013.A nominal yearonyear increase of 17 percent resulted in 2015 ending on an average sale price of R4.5m. "Apartments in Rondebosch fared equally well, with the average price increasing from R900 000 in 2010 to R1 .3m in 2015 and by the second quarter of 2016 it reached R1.6m." It's a case of you snooze, you lose