Fast sales at Fountain Views reflect market needs

Fast sales at Fountain Views reflect market needs

Artist’s impression of Fountain Views in Brackenfell.

By the end of the third week following the launch of Brick n Board’s Brackenfell development, Fountain Views, 55 of the 61 apartments will have been sold.

And Rowan Alexander, director of Alexander Swart Property, the estate agency responsible for the sales and the marketing of Fountain Views, expects a full sell out by mid-July.

“The very fast sales here,” says Alexander, “have come about because the development was designed for today’s market.”

He says a slowdown had been seen in many developers’ northern suburbs sales because their projects are geared to higher end buyers and these are not as thick on the ground as they used to be.

“Fountain Views, by contrast, exactly meets the needs of today’s buyer,” he says.

“RE/MAX recently reported that for the first time in many years some Cape Town rental apartments are standing empty and landlords are cutting their rents by 10% to 20% and getting returns as low as 4.5% whereas previously the average was 6%.

“John Loos, FNB’s property analyst, has expressed a similar view: he pointed out that there has been a tailing off of demand at Cape Town for high end properties, most notably those on the Atlantic seaboard and in the City Bowl.

“Loos said too that although the more affordable suburbs, especially those to the north of Cape Town, had been less affected, they have witnessed a shift in demand to relatively less expensive rental and bought properties.

“Loos attributed the recent less optimistic market conditions to a slowing down in the migration to the Cape from other South African provinces – at one stage non-Capetonians were responsible for 12% of all Cape Town’s property buys. This, in turn, he believes, has come about as a result of the water restrictions, the widely reported tensions in the local DA administration and, as elsewhere in South Africa, the increase in VAT to 15%.”

Alexander says most of these rather disheartening influences were identified and predicted by the Alexander Swart Property team as much as 12 months ago. As a result, it was one of the few agencies able to influence developers to tailor their projects towards today’s changing market.

Asked what specific advice he and his colleagues had given Cape Town’s northern suburbs developers, Alexander says they had recommended that buy-to-let apartments be priced below R1.7 million, and buy-to-occupy apartments should be below R3m.

“The fast sales at Fountain Views show that there are still very good opportunities in the now popular buy-to-let developments if the price is right. At Fountain Views the apartments were brought to the market at R1.145m and R1.35m.”

In the multi-apartment market, with his agency’s help, said Alexander, several new projects will be launched over the coming year and these too he expects to sell well. But he says projects launched at prices above the levels mentioned can often take a year or more to sell.

Fountain Views sales, added Alexander, have also shown there is no need to rely on upcountry buyers. All the buyers so far have been from the Greater Cape Town area, and 80% of the buyers have either been property owners in Brackenfell or have businesses there.

“Downscalers and first time buyers are important in today’s market – at Fountain Views they comprise over 30% of the clients. The developers’ reputation built up over several years is crucial to the success of such projects. Brick n Board’s standing is very high among northern suburbs clients, says Alexander.

“The average northern suburbs resident’s faith in Brackenfell property remains very strong.”