Strong demand for affordable Cape Town property
Home sales in Cape Flats suburbs such as Athlone, Kewtown and Hanover Park are currently surging as the area enjoys the knock-on effect of strong demand and price inflation right acrossCape Town.
This four bedroom house in Gatesville, Cape Town, has three reception rooms. It was on the market for R1.995 million and has already been sold.
This is according to Narriman Mohammad, owner of the RealNet Athlone franchise, who says prices in the Cape Town metro as a whole have risen by 14.9% in the past year, according to the latestWestern Cape House Price Index compiled by FNB.
He says this is good news for property owners in Athlone and the surrounding suburbs, as the increase in values means that many can now sell at a profit, and upgrade to bigger or more expensive properties.
Mohammad says some older owners are also now finding this an opportune time to sell and move to a secure complex or retirement village, which is, in turn releasing stock into the market and opening the way for younger buyers to get onto the property ladder in the more affordable areas.
And there is certainly no shortage of demand, she says, thanks mostly to the fact that these areas are so close to the Cape Town CBD and well-served by public transport.
“Current sales are robust, with demand also being driven by that Athlone itself, is a business hub and attracting people who want to live close to their workplaces.”
This home in Crawford, Cape Town, has five bedrooms and an alarm system. It is on the market for R1.65 million - click here to view.
Mohammad says buyers who are upgrading are moving to homes in areas such as Rondebosch East, Crawford, Gatesville, Rylands, Plumstead andLansdowne, where prices range from about R600 000 for a two bedroom apartment, all the way up to around R2.8 million for a large four bedroom family home.
However, she says the majority of sales being handled by her franchise are to people targeting homes in the R250 000 to R1.5 million range.
“Currently, 75% of all home loans being granted are to first-time home buyers aged 30 to 35, and from a diverse mix of cultural backgrounds. Their preference is for low maintenance, lock-up and go homes with high security features, and their needs include proximity to schools, churches, shopping malls and places of employment.
She says these buyers generally don’t have large deposits, and are often working on a tight budget that is sensitive to interest rate or fuel price increases, food price inflation, the availability of public transport, and if they are running a local business, to load shedding.
“Consequently, we are always careful to leave them enough room to manoeuvre when we calculate their ability to pay their home loan instalments in addition to other monthly payments, and to take a conservative approach when advising them how much they can realistically afford to pay for their new home,” she says.
In this regard, Mohammad says the increase in the transfer duty threshold to R750 000 this year, has further boosted demand in the area, and not because it enables buyers on a restricted budget to buy more expensive homes, but because it reduces the amount of cash they need to have on hand in order to complete the transfer process.