Rondebosch sectional title sales increase by nearly R38 million in 2014

Prices of sectional title properties have risen substantially in Rondebosch over the past two years with total sales increasing by nearly R38 million as demand for accommodation increases in this sought-after suburb close to the University of Cape Town.

In 2013 60 sectional title units in the area were sold for a total of R70 015 500, and in 2014 73 units were sold for a total of R107.844m. And average sales prices rose from R1.1m in 2013 to R1.4m last year, says Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty.

“Properties sold on average within 50 days in 2013, which came down to an average of 39 days in 2014. The only properties not selling within just over a month of being listed last year were typically those that were over-valued or over-priced.

“The fact that the average selling price is so clearly on the rise is certainly a sign that we’re in a seller’s market, particularly in the sectional title arena.”

Arnold Maritz, Lew Geffen Sotheby’s International Realty co-principal for the area, says that one of the reasons for this large increase in sales is the fact that there have been a number of new sectional title apartment developments in Rondebosch over the past two years.

He says: “Rondebosch is primarily a residential suburb in the southern suburbs with a medium size shopping area as well as a small business district. It’s best known for its excellent schools and also for its proximity to UCT, which makes it highly desirable from an investment point of view.

“One of our big markets is parents buying apartments for their children while they are studying, because they know how much the value of their properties will increase over the three to seven years in which their children live there.

“Another big market is investors buying up units in bulk to rent to students, because UCT supplies an endless rental pool and accommodation in the area is scarce.”

Proximity to the Jammie Shuttle that runs to and from University of Cape Town through Rondebosch is a vital driver for the demand in student housing in the area.

Maritz says that buyers tend to find the older flats in the suburb to be very good investments. The levies are lower than many of the new developments and the older sectional titles are usually larger. Also, if the body corporate has been well managed, the accumulation of funds over time helps keep monthly levies low.

This means that often the capital appreciation might be greater as buyers are not paying in at a new block rate.

Maritz says: “In the older sectional title developments buyers are more likely to find features such as landscaped communal gardens, high ceilings and well-proportioned rooms.”

Geffen says: “There isn’t enough accommodation in the area, which has prompted so much new sectional title development. Because modern units tend to be smaller they are often more affordable as a capital investment, but prospective buyers should be calculating the entire monthly expense, including levies, when they’re deciding on a property.

“Whether choosing old or new, though, there’s no question that Rondebosch is a good suburb in which to invest and sectional title is the most affordable way to do that.”

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