Cape Town, hey.
The City was named Design Capital of the world back in 2014, which was just another accomplishment about which we could toot our horn.
Soon, thanks to a more relaxed lifestyle in scenic surrounds, our property prices soared through the roof.
In 2016, a German couple was happy to fork out a staggering R290 million for a mansion in Bantry Bay. The sale set a new record for SA house prices, although the rest of the country remained unfavourable, reports Business Live:
The average Gauteng homeowner has had to be satisfied with a 22% increase over the five years ending December, less than half the Western Cape’s 50% growth over the same time, FNB figures show.
But, as with everything that rises, a fall is inevitable – and it appears our beloved city is in the midst of a decline.
You might assume it all has to do with the drought, but other factors that are at play include the decline in our economy, an increase in dangerous crimes, and the DA’s increasingly tarnished reputation:
Splurging R30m on a swanky Camps Bay or Clifton abode no doubt loses some of its allure with the realisation that taking a hot shower and a refreshing dip in a sparkling clean swimming pool or running your washing machine and dishwasher may all soon become a thing of the past. There is also the possibility of raw sewage leaks if the water flow in the city’s sanitation system is sharply reduced, which could pose health risks.
All things considered, wealthy would-be buyers, especially new entrants to the Cape Town housing market, are bound to put buying decisions on hold.
The decline was noticeable in December, when upper-holiday rentals over the season dropped:
Ruth Munitz, manager of SeeffShortstay, who had a number of big-ticket holiday homes on the Atlantic seaboard to let in the R50,000/day to R115,000/day range, said in December that rental bookings at the upper end were “very slow”.
And, regarding property sales, the Atlantic seaboard started feeling the heat:
Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, says sales volumes across Cape Town’s top-end suburbs are down around 30% year on year.
As a result, prices have already dropped in some suburbs. Geffen refers to Lightstone Property’s latest figures, which show that in Fresnaye average house prices are down 1.76% in the three months ending November — from a 12-month average of R15.21m to R14.94m.
Bantry Bay took a bigger knock, with the average sales price of R12.95m in the three months ending November being 15.9% lower than the annual average of R15.47m.
In Sea Point and neighbouring Greenpoint, average prices dipped by 7.89% and 3.26% respectively over the same period — from R7.29m to R6.72m and from R7.29m to R7.05m.
Not only have prices decreased, but the time it takes to sell a house has gone from four months a year ago to six months now:
“Some properties are selling for as much as 20% below asking price,” says Seeff Atlantic seaboard agent Pola Jocum. She says sellers will have to become more realistic in their asking prices and stop using overpriced listings to guide their price expectations.
And new buildings? Well, plans are having to be changed. From going green to building empty swimming pools (as they are not allowed to be filled/refilled), the City is telling residents to adapt, as conditions under the drought are “the new normal”.
But there’s one area that will keep on thriving.
Yes, for those of you who are in the City, either your rent is going to go up or your asking price increases – this after the City announced that CBD will not be affected by water shortages:
Basil Moraitis, Pam Golding Properties area manager for the Atlantic seaboard, says the company is already seeing more interest in CBD apartments. There is a rising trend of owners of larger stand-alone homes with pools and gardens opting for sectional title living, given the lower water consumption and maintenance requirements.
It is even being predicted by some that Capetonians will soon be looking at moving to other regions in South Africa.
Damn, have we already come to that?
For those of you who have the balls to stay, you might want to take a look at what water-saving products Takelot.com has to offer. Oh, and you can win a R500 voucher, too.
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