Fish Hoek the star of 2017 in the False Bay market

Fish Hoek the star of 2017 in the False Bay market

FALSE BAY GEM: Fish Hoek has proved to be the investment gem along the scenic False Bay coastal strip during 2017.

After a solid finish in 2016, this year has seen the False Bay market finally succumb to the pressures of the subdued domestic economy with the decline further fuelled by a notable drop in semigration and, as a result, Fish Hoek was the only suburb to show any real growth in 2017.

This is according to Steve Thomas, Lew Geffen Sotheby’s International franchise manager in False Bay and Noordhoek, who says: “Measured year-on-year during the first two quarters of this year, Fish Hoek saw a modest 6% increase in the total rand value of sales compared to the same period last year. Like the rest of the region, the suburb also experienced a dip in sales volumes with houses and sectional titles sales dropping by 11% and 9% respectively.

“However, this dip was not as steep as in suburbs like Simon’s Town where CMA data shows a 23% drop in house sales and sectional title sales declined by 50% during the first half of 2017. Also hard hit this year was Noordhoek where there were 19% fewer houses sold and 33% less sectional title properties changed hands in the first and second quarter.”

Thomas says that in addition to the dismal economy, there are several other factors which continue to negatively affect the market along this coastal strip.

“From the coalface, the market has been in a considerable state of apprehension for more than a year now, due to a convergence of factors, including global economies, the weakness of the rand, political chaos, water shortages, inflation and lifestyle choices.

“And the latter carries a lot more weight than people give it credit for as it has numerous influences on markets such as millennial generation trends, available building space, scarcity of resources, life expectancy increases, pension savings and health provision.

“Broadly speaking. most sellers are seeking top prices for their properties and most buyers are now seeing bargain opportunities in a market which is increasingly becoming a “buyer-market” which results in a of lengthening the sales cycle and increase in available stock.”

Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, says that while these downward market shifts are sobering cause for concern, all is not doom and gloom as property values here have continued to increase, although notably slower than in previous years.

“According to Propstats, between January 1 and the end of November this year there were 26 confirmed sales in Fish Hoek at an average sale price of R2.638m with the highest price achieved being R5.53m for a three-bedroom apartment sold within six days of listing. Properties spent an average of 60 days on the market and realised on average 7.9% less than listing prices.

“During the same period in 2016 there were 40% more properties sold (44) but at an average sale price of R1.93m with the highest price being R4.3m for a single storey house which was sold after a month on the market. Last year homes spent an average of 37 days on the market and on average achieved 7.1% less than listing prices.

“In Muizenberg there were 32 properties sold during the first 11 months of this year at an average sale price of R1.11m, of which 17 were sectional title units averaging R1.085m and 15 houses achieved an average sale price of R1.14m.

“In 2016 there were 43 sales which achieved an average price of R1.22m. Of these, 17 were apartments at R1.09m and 26 freestanding houses averaged R1.31m.

“In Noordhoek, which comprises almost 100% freestanding homes, last year 25 house sales realised an average selling price of R3.67m and the three sectional title units which changed hands were all sold within a month of listing at an average of R1.3m.

“This year 26 houses were sold at an average price of R3.59m and there were no sectional title sales.”

“Generally, we are finding that buyers are nervous about investing in a home unless it’s essential,” says Thomas, “and while this differs from person to person, the current reticence relates largely to return on investment (ROI).

“Although Cape Town property is still relatively cheap compared to similar global markets where comparisons can be drawn like Sydney, California and the Mediterranean, investors are mindful of massive potential political changes which may have an intense weakening effect on the rand, meaning their ‘cheap’ investments will plummet in value.

“In this respect, there is a large portion of the buyer market poised in a “wait and see” holding pattern and even those who need to buy may invest less capital and take lesser bonds as an interim solution. The attractive prospect of investing capital elsewhere while renting somewhere to live at lower cost is, once again quite a viable option and we are seeing this trend.”

Thomas concludes: “My only prediction for the year ahead is that we should expect the unexpected during 2018 as the property market is largely dependent on political stability and the currency strength and as we stand, the status of these factors in the foreseeable future is completely in the air.

“Despite Cape Town still being an excellent investment in lifestyle and capital terms, the fragility of the socio-political environment is a key influencing factor because at the end of the day, it’s all about perception: confidence or risk?

“I do remain cautiously optimistic and believe that we will overcome the current bumps in the road, however, this path would be smoothed considerably with the introduction of incentives like reduced transfer duty and better buy-to-let and first-time buyer bond products.”