Residential News

City Bowl property shuns poor economy with record turnover and price levels

If you are going to invest in property this year and you are looking for a central location and excellent capital growth, then the suburbs of the City Bowl certainly should catch the eye. Ms Billy Rautenbach, sales director for Seeff’s operations across the area, says that the suburb is rewarding the patience of investors.

Despite flat year-on-year performance in terms of the number of properties sold, the overall value generated reached a record high of around R2.36bn last year, double that of 2010 (R1.16bn) and 19% more than the R1.9bn generated in 2015.

In the post 2007/8 period, the CBD and City Bowl suburbs were among the worst performing in the city. Properties often sat on the market sometimes for up to 180-250 days. By 2015, the time that it takes to sell had improved to below 50 days on average. Last year, despite the worsening economy, it dipped further to around 42 days on average, indicative of quite a healthy market, says Ms Rautenbach.

The City Bowl is hot property with new developments selling like hot cakes. Be sure not to miss your opportunity to get in while you still can. New to the market, is a boutique development offering two-bedroomed units (87sqm-100sqm) with high quality finishes including Oggie wooden flooring, parking and a communal rooftop deck with a pool and barbeque facilities. Prices start at R4.071m including VAT.

Five years ago, sellers were getting offers of 10%-20% below the asking prices on average. By last year, this had halved to around 5%-6% despite the higher prices achieved. In reality about half of all deals are still concluded for almost full price. A notable upside surprise is the phenomenal year-on-year growth in the average selling prices of 17%-18% measured overall for the market.

Ms Rautenbach points to a high desire for the area and solid capital retention and growth as driving the demand. It is also not just the sales sector, but the rental sector too is booming, both in terms of short stays and long-term rentals.

While the overall volume of sectional title sales remained flat year-on-year, the full title sector enjoyed a 9% increase to 140 unit sales, up from 128 in 2015. The total rand value increased by a whopping 28% to over R1.071bn. Naturally, says Ms Rautenbach, this meant good year-on-year growth in the average selling price of 17% to R7.6m, up from R6.5m in 2015 and about twice as much as the 2010 average of R3.6m.

The sectional title sector continues to be very active, both in the CBD and surrounding City Bowl suburbs, she adds. The total value of sales for 2016 by 11% from just over R985.859m to well over R1bn. The average price per unit sold increased by 18% from R2.2m to almost R2.6m.

There is also now a clear shift to younger buyers, not just in the CBD, but also in suburbs such as Tamboerskloof, Oranjezicht and Higgovale. Up to 30% of buyers over the last year fall into the millennial under thirty five age bracket and a further 40% are under the 50-year age group.

This year is already off to a busy start with January sales of R205m for the whole area, a notable almost 40% more than last year January (R148m). Any well-priced property still sells for quite quickly, often in well under a month.

New developments, despite the slightly high price tags too are selling like hot cakes. Ms Rautenbach says that agents expect the area to further cement its Blue Chip status and investment value. There is just too much interest in the central city for it not to produce good results this year again.