Densification is transforming the Southern Suburbs property landscape

Densification is transforming the Southern Suburbs property landscape

DENSIFICATION NOW A PROMINENT TREND: Demand is driving densification in the traditionally freehold southern suburbs, with exclusive compact developments like 54 on Dean in Newlands becoming commonplace.

With an ever-increasing demand for homes coupled with a severe shortage of greenfield land in Cape Town’s southern suburbs, residential development in this section of the city is rapidly densifying.

But rather than vast, entry-level developments that are the hallmark of the suburbs along the western seaboard, small luxury clusters of between three and 10 homes are the dominant feature of the evolving southern suburbs property landscape.

Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty says: “Traditionally the southern suburbs market was synonymous with spacious family homes and large gardens. This isn’t the case anymore, though, with sectional title properties now accounting for between 30% and 40% of the title deeds in the area.

“To meet the growing demand, sectional title blocks have been developed in suburbs like Claremont and Rondebosch, and compact upmarket gated developments have been established in Wynberg, Newlands, Claremont, Kenilworth and Constantia.

“Until very recently, Constantia was 100% freehold and there are currently three developments under way with exclusive complexes like Hoogeind in Claremont having pioneered the trend.”

Cyndy Minnaar of Lew Geffen Sotheby’s International Realty in Newlands says: “Subdivision in predominantly freehold upmarket suburbs like Newlands and Claremont has started reshaping these areas in the past couple of years, with at least a dozen big older homes making way for compact developments.

“These new complexes usually comprise four to six freehold townhouses with a common entrance, the most recent being 54 on Dean in Newlands.”

Priced at R5.995 million a unit including VAT, the complex of four luxurious double storey, three bedroom homes is within walking distance of SACS, Westerford, Dean Street Arcade and the Jammie Shuttle, and a stone’s throw from the M3 arterial.

Geffen says: “When demand outweighs supply in desirable upmarket suburbs, investment almost always yields exceptional returns, irrespective of market conditions with properties in secure estates being especially receptive to significant capital growth.

“Premium homes in exclusive and highly sought-after areas like Claremont rarely become available for purchase and, when they do, they tend to sell quickly.”

In suburbs like Wynberg, Kenilworth and Rondebosch where there has always been a sectional title offering, many of the older blocks are now being renovated and formerly dilapidated office buildings are being transformed into modern urban apartments.

Matthew Raubach of Lew Geffen Sotheby’s in Wynberg, Plumstead and Kirstenhof, says the overall value of many sectional title properties doubled over the past five years, and apartments priced under R2m are almost always snapped up as soon as they hit the market.

This is especially true in the suburbs nearest the university where there is a dearth of student accommodation, says Tina Malyon of Lew Geffen Sotheby’s International Realty in Mowbray and Rosebank.

“The demand for apartments in these suburbs far outstrips supply and most of the properties I list barely spend any time on the market, frequently selling for the listing price and sometimes even for more.”

Claremont, the main commercial hub in the southern suburbs, has also undergone significant change in recent years with the entire precinct being revamped, including the development of several residential and mixed-use properties like The Claremont, Grove Exchange and The Citadel.

Geffen says: “Driven by demand and affordability, the sectional title market in Cape Town’s southern suburbs is weathering the current economic slump, and continues to offer investors inflation-beating returns on investment.

“Although people traditionally buy in the southern suburbs to live near good schools and raise their families in a peaceful suburban environment, investors are finding sectional title and complex homes increasingly attractive, given the active rental market, increased level of security and the growth in value of such properties.”