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Property Comparison: Northern Suburbs VS Southern Suburbs

Category Advice

Northern Suburbs is where the action is for Cape Town’s first-time buyers

Rocketing demand from Millennials and buy-to-let investors has caused property prices in Cape Town’s fashionable CBD and City Bowl areas to explode over the past few years – to the extent that those same buyers are now having to look further afield to find homes they can afford.

That’s the word from David Britz, sales and marketing director of leading developer Multi Spectrum Properties, who says that while many first-time buyers would love to live in the regenerated CBD or a trendy inner suburb like Woodstock, Observatory or Rondebosch, most are finding that the market entry-level in these areas is now just too high for them.

“As for investors, those who got into these markets five years ago have done very well in terms of capital growth and are enjoying good rental yields. But many who are contemplating new buy-to-let purchases now are finding that the potential returns over the next five years are not as good because of the relatively high purchase prices.”

And both groups, he says, are seeking answers on the Western Seaboard and, to a much greater extent, in the metro’s Northern Suburbs, where developments like MSP’s Buh-Rein Estate offer all the advantages of the “new urban” lifestyle to be found in the city, at a much lower cost. (See table.)

Suburb

Average

s/title price 2013

Average

s/title price 2018

Average

freehold price 2013

Average

freehold price 2018

Buh Rein

R490 000

R1m

R1m

R1,6m

CBD

x

x

x

x

Observatory

R735 000

R1,726m

R1,25m

R2,375m

Rondebosch

R1m

R1,75m

R2,8m

R4,56m

Woodstock

R670 000

R1,85m

R970 000

R2,75m

Data source: Lightstone

“There are also scores of new developments going up now in northern areas like Brackenfell, Kraaifontein and Kuils River, and it has been estimated that up to 40% of current buyers in these areas are first-timers – in sharp contrast to the first-time buyer percentage in Cape Town as a whole, which FNB has estimated at under 10%.”

      

Meanwhile Buh-Rein Estate, which has been proclaimed as a fully-fledged suburb with its own postcode, was ranked as the fifth most affordable suburb in Cape Town in a Private Property survey conducted late last year (see https://www.privateproperty.co.za/advice/news/articles/cape-towns-20-most-affordable-suburbs/6065)

Located just to the north of Kraaifontein, this integrated lifestyle development offers modern apartments, townhouses and freestanding homes in a series of secure “villages”, as well as a pool situated close to a family restaurant, outdoor gym, jogging trails and multi-purpose sports field and pavilion for residents.

“The estate will shortly also boast its own convenience shopping centre, as well as a Checkers supermarket, a gym, a service station and a 10 000sqm storage park. Private schools within easy reach include Meridian Pinehurst, Curro Castle in Uitzicht and Curro Durbanville, and tertiary education group Stadia is currently planning a private university just over 3km away close to the end of Okavango Road,” says Britz.  

“The latest residential developments in Buh-Rein include Blue Lily Lane, which offers two-bedroom apartments with top-quality finishes at prices from R1 134 900, and Sterling Grove, which offers luxurious double-storey homes with three bedrooms, 2,5 bathrooms and single or double garages at prices from R1 819 900.

“A limited number of apartments are also still available in the completed Libertas sectional title development at prices from R989 000 and in the Sable Ridge freehold development, at prices from R1 719 900.”  

He says there is also high demand for long-term rental homes here from those working in Stellenbosch, Paarl, Kuils River and the Durbanville CBD and keen to avoid having to commute from central Cape Town, so the estate is also attracting a lot of attention from buy-to-let investors.

“Rentals for two-bedroom, one-bathroom apartments in Buh-Rein Estate currently average R8000 to R8500 a month and resale units are currently priced at between R700 000 and about R1,2m. By contrast, rentals for similar units in central Cape Town currently range from R11 500 to around R14 000, but the purchase prices of such units only start at around R1,8m and go all the way up to about R2,9m.”

Author: Multi Spectrum Property

Submitted 03 Jul 18 / Views 592