Record sectional title sales for Rondebosch

Significant socio-economic shifts in recent years have transformed Cape Town’s southern suburbs sectional title sector, attracting a broader buyer demographic and strengthening the market.

No longer the domain of first time buyers and aspirant young professionals, the sector now offers a wide range of property options across all market segments with record sales being achieved despite the prevailing climate.

This is according to Megan Milne and Justin Nortier, sectional title specialists in Rondebosch, Newlands, Rosebank, Claremont Lower, Kenilworth Lower and Mowbray for Lew Geffen Sotheby’s International Realty, who recently broke their own record when they achieved the highest sale price for a Rondebosch apartment – just seven months after they set the previous record in the same complex.

“Contrary to current trends, the top end of the sectional title market in Rondebosch fared better than expected in 2017, with consistent demand for apartments in sought-after complexes like Ecklenberg where we brokered a record sale price of R6 million for a 250m² unit last year.

“That price was topped by R500 000 in March in a joint sale with the listing agency of another apartment in the same complex after we introduced the buyer on the day of listing and the property was sold within three days for R6.5m.”

Milne adds that this market segment is largely driven by empty nesters who are downsizing as well as swallows – foreign investors who spend summer in Cape Town.

The lower end of the sectional title market has also held its own, which Nortier largely attributes to the higher ROI in relation to the purchase price which continues to attract the interest of investment buyers.

“Properties priced below R1.5m with good rental income potential are always in demand, especially one and two-bedroom units which are very popular in the rental arena and offer good returns. These properties are also very attractive to first time buyers as it offers them an accessible entry into a sought-after market.”

Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, says that although the sectional title market in Rondebosch was notably more resilient than many comparable markets last year, it was by no means immune to the pressure.

Citing Propstats data, he explains: “In 2016, around 55% of all apartment sales were cash transactions with the average sale price of R2.06m and the difference between listing and sale prices just 4%. However, last year the number of cash sales dropped to 40% and the average sale price dropped to R1.98m while the difference between the marketed and final sale price more than doubled to 8.4%.

“However, the new year has kicked off on a very promising note with the average selling price of the 13 sectional title sales to date only 4.2% below the average listing price of R2.47m, which is 24% higher than last year.”

“Kenilworth and Claremont also showed resilience in the current market conditions,” says Milne, “with a solid increase in the median apartment selling price between 2016 and 2017, from R1.10m to R1.375m and from R931 000 to R1.2m respectively which translates to a respectable growth of 25% and 28.8%.”

According to Milne and Nortier, the last year has also seen a transition in the buyer demographic in Rondebosch: “We have seen an increase in the number of first time buyers and investors while on the flip side there has been a decline in the number of student parents buying flats for their children who attend the university.

“The buyer demographic in Newlands, however, has been stable with most buyers looking for larger modern apartments to either downscale from freehold or upscale from smaller units.”

The duo concludes: “There is most definitely still an active market for sectional title properties in the southern suburbs, however, accurate pricing is essential or even the best apartment in the area could end up sitting on the market for months.

“And, especially during tougher economic times it’s crucial that sellers ensure they appoint an agency with an extensive database of potential buyers and proactive agents who have a thorough knowledge of the market in the area, especially in a subdued market.”