PROPERTY MARKET: ANNUAL REVIEW 2021

Overview

In looking back at 2021, the aim of this review is to look at broad trends and patterns in the sectional title property market in the four residential property nodes. This review excludes sectional title hotel rooms, offices, parking bays (sold independently of apartments) and retail spaces. All data is from CMA Info (as at 11^th January 2021), which in turn, is data drawn from the Cape Town Deeds Office. In order to gain some context, this review compares like-for-like CMA Info data for 2020 and 2019 of properties sold up to R20m, that helps in understanding where we might be at in the property cycle. CMA Info data reflects actual property transfers in the Deeds Office, and therefore represents a time lag from agreed sales to legal transfer. Analysis and commentary of the City Centre residential market is relatively more in depth as it accounts for some 70% of the total number of sales over the four property nodes. Detailed data on specific residential complexes is available on request for owners that would like to understand the values of the sectional title schemes they are invested in. As always, there are a range of opinions in the marketplace on where the property market is at or may be heading. This review reflects my views as a specialist in residential sectional title property sales based on the data and my knowledge of the market.

Very best wishes for 2022!

Richard

Cape Town City Centre

The City Centre residential property market has begun to show early signs of recovery. There was clearly a dip in average selling prices and average R/m2 in 2020, with values and the overall number of sales improving in 2021. If the upward trend in sales continues in 2022, then the total number of sales is likely to be at a level last seen in 2017, when the city centre market peaked at the top of its cycle. A steady increase in the number of apartments selling is a positive sign of a recovering market. Historically, when the number of properties selling goes up, the Rand values follow closely behind. We can be cautiously optimistic that 2022 is the year when the market pulls out of the bottom of its cycle.

What sold best in 2021?

56% of residential sales in the city centre were in the R1,5m to R3m bracket, which along with the 34% that sold under R1,5m, means that 90% of the market was sales under R3m. Just 8% of sales were in the R3m - R5m segment, with just 2% over R5m. This suggests that the city centre property market remains one dominated by first time buyers and investors. In terms of re-sales of residential stock in the city the top five by numeric sales were Mutual Heights, Icon, Mandela Rhodes Place, St Martini Gardens, and Pepper Club. To some extent this reflects the larger scale of these particular sectional title schemes.

What's in Store for 2022?

It is worth noting that the City Centre is undergoing a new rejuvenation and renaissance as we head into 2022. The first regeneration of the central business district was in the early 2000's. Now, twenty years later, the city centre is experiencing a new wave of redevelopment, with billions of rands invested in the construction of new residential and mixed used developments, particularly towards the Foreshore and East City. Harbour Arch, The Harri, The Rubik, The Tokyo, Foreshore Place, The Rockefeller, The Barracks, Shiro Towers, Uxolo, The Duke, are some of the residential/mixed-use developments either recently completed, well under construction, or that have now broken ground. Neighbourgood also continue to expand offering an exciting new concept to the City Centre. As in the early 2000s this is phenomenal news for the city centre. It represents a huge vote of confidence in the future of the city centre, and as always, new cafes, restaurants, retail and business will follow on as these buildings open. It will also be a boost for the existing residential component of the city centre, as the city becomes more sought after as a place to live, work, and play.

The Foreshore

The Foreshore saw less sales in 2021 than in 2020, although average sales prices remained steady, as did the average R/m2. Average values holding is relatively good news for this residential node, which will benefit from a greater connection to the Waterfront Silo Precinct once the redevelopment of the old petrol station site is complete, creating a much better flow between the two areas. Two thirds of the sales in The Foreshore are under R3m, and a quarter are in the R3m to R5m segment. Of the three main residential developments in this precinct, The Yacht Club saw seven sales in 2021, with Harbour Bridge and Canal Quays having three and two sales respectively. The new developments coming on stream in the lower parts of the central city are likely to have a positive impact on the fortunes of The Foreshore itself.

De Waterkant

De Waterkant had an almost static year in terms of the number of sectional title sales, along with an overall decrease in the average selling price and average R/m2. This suggests that it may be slightly slower in pulling out of the property cycle downturn than other residential nodes. As a precinct, it has a relatively higher proportion of higher value properties than the city centre. 70% of sales reflecting for De Waterkant are in the under R3m segment, with a further 26% in the R3m - R5m segment. This simply reflects the appetite of investors, who are mostly not looking to buy above R5m at present. The over R5m market in the area remains a niche market, which will undoubtedly pick up again as the market turns. 117 on Strand, The Docklands, The Rockwell and The Signature comprise the top four selling complexes for 2021, although three of these are relatively new developments. The Rockwell continues to hold its own in a competitive market.

V&A Waterfront

The V&A Waterfront showed signs of improvement in 2021, compared to 2020 and 2019. All key indicators were up. As a precinct its sales split almost 50/50 between those under R10m and those over R10m. Of the older Marina complexes, Kylemore was the busiest in 2021, with six apartments exchanging owners, followed by Juliette and Carradale. In the Silo precinct, there were five sales in No.2 Silo, and three sales in No.3 Silo. The overall lower number of property sales in this residential node reflects the fact that it is one of the more niche property markets in Cape Town.

Here to assist.......

Please do not hesitate to contact me at anytime to discuss your property requirements, including a free, no-obligation valuation. Or, if your property is already on the market, it's current pricing and advice on selling at the best price. I am available by appointment seven days a week between 8am and 8pm to assist with all your property requirements. I can be reached via Whatsapp on +27 (0) 81 063 1871, or email at: richard@kinesisproperty.co.za