False Bay coastline increasingly popular with upcountry investors

The False Bay coastline is fast becoming the new “hot spot” for upcountry buyers who want to invest in second homes in the Cape, and this is driving up prices and closing the gap between marketed prices and achieved selling prices.

DOUBLE VALUE: Family homes on the False Bay coastline such as this one in Simon’s Town can still be found for around R3 million or even just less, but they’re quickly snapped up when they come on the market.

The average sale price of houses in many of the suburbs along the picturesque stretch from Muizenberg to Simon’s Town has now significantly exceeded the R2 million mark it was nudging just a year ago, however, the region still offers excellent value for money and is far less congested than its Atlantic seaboard counterpart.

This is according to Steve Thomas, franchise manager for Lew Geffen Sotheby’s International Realty in False Bay and Noordhoek, who says: “In addition to the accessible prices, the buoyant residential market we experienced throughout 2015 was also driven by an increasing investor awareness of the laid back lifestyle combined with spectacular scenery and sea views.”

“In suburbs like Simon’s Town, the median house price is now hovering around R3m, which will buy an older two- to three-bedroom home in need of a little TLC. But it will probably also have sea views and be conveniently close to beaches and amenities,” says agent Beverly Goldhill.

She says the increased demand from upcountry investors is also changing the demographic of the area as a growing number of buyers are young professionals from Gauteng who are getting a head start on their retirement plans and investing earlier.

The most affordable suburbs are Muizenberg, Welcome Glen, Glencairn Heights, Capri and Sunnydale, with Muizenberg currently ahead in the popularity stakes at the entry level because of its affordability and excellent value for money.

Says Thomas: “Muizenberg is especially popular with first-time buyers as there are very few areas in the Cape where you can still buy a freestanding two-bedroom home near the beach for around R800 000.”

According to Thomas, the most active markets at the moment are Simon’s Town and Fish Hoek as they offer the whole lifestyle package, including a relaxed holiday atmosphere, excellent swimming and surfing beaches, spectacular views and many outdoor activities.

“Neighbouring suburbs on the Atlantic side of the South Peninsula are equally sought-after and over the past year we have experienced increasing stock shortages in the entry and mid-level market sectors in Noordhoek and Kommetjie for the first time since 2002.”

Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, says that the “buy to rent” trend is steadily increasing as more and more foreigners and locals are recognising that these coastal areas are a sound investment and also offer excellent holiday rental returns with the benefit of the future prospect of relocation to live or retire permanently.

“Shrewd investors are realising that now is the time to buy for maximum return on investment as the natural limitation of available land along the coastline due to its topography and the growing demand will soon result in a dearth of investment opportunities and sharp increases in price.

“In the last quarter of 2015 we noted a marked increase in sales in this sector and available land is already becoming a scarce commodity. Last year Sotheby’s International Realty in False Bay sold two very large properties of around 70 acres and 90 acres that had been stagnating on the market for many, many years.”

Thomas says there has also been a marked increase in interest from developers in the past couple of years.

“For a long time, there was very little new development along this coastline until lifestyle estates slowly began popping up in response to the growing interest from Gauteng buyers and locals wanting to move away from the city. The latest development is the Evergreen retirement village which is under construction on the Fish Hoek mountainside.”

The knock-on effect of this market growth is an increase in commercial development such as the new Sun Valley Mall retail development with flagship tenants and a Virgin Active gym which will, in turn, have a positive effect on the residential market.

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