Property performance powers ahead

Stellar returns on selected Atlantic Seaboard properties in Cape Town have at times outstripped the performance of some competing local asset classes, returning positive increases against international currencies including the US dollar and euro, Pam Golding Properties research reveals.

A super-luxurious R15million, two bedroom apartment in a sought-after Mouille Point beachfront block (under exclusive mandate to Pam Golding Properties) exemplifies how Atlantic Seaboard sectional title properties can hold their own as a superb investment.

Over the past decade, prices of sectional title properties have risen by 151.6% in Mouille Point (median price R3.12m in 2015) and by 133.8% in the V&A Waterfront (median price R9m in 2015).
This is nearly double the 80.9% increase in the consumer price index during the same period. However, the increase in property prices does not quite match the performance of the FTSE/JSE 40 (178.6%) during the same period - but has achieved a respectable 151% in Mouille Point and 138% in the Waterfront.
During the past five years, however, the increase in sectional title property prices in Mouille Point has outstripped both the FTSE/JSE 40 and the consumer inflation rate. In contrast, the increase in prices in the Waterfront fell short of the rise in the FTSE/JSE 40, but exceeded the increase in consumer inflation.
Trends underpinning the performance of Atlantic Seaboard sectional title properties include the prime location for work and leisure, seeking a rand hedge, densification and growing numbers of first time buyers, say Pam Golding Properties Mouille Point and Waterfront area specialists, Paul Levy and Mariel Burger.
When comparing the performance of Atlantic Seaboard property prices in various major currencies, it is clear that repeated bouts of rand weakness against both the euro and the US dollar have eroded some of the increases in local house prices over the past decade.  Nonetheless, these have continued to remain in positive territory despite the depreciation in the local currency, say Levy and Burger.
In Mouille Point, house price inflation was 25.55% in dollars and 40.8% in euros, versus 151.6 % in rands. On the Waterfront, inflation was 16.6% (dollars), 30.8% (euros) and 133.8% (rand).
“This clearly demonstrates that investment in properties in these locations has returned better results than had the investor elected to retain deposits in dollars and euros over the same period.”

Table 1: Over the past decade, Mouille Point and V&A Waterfront sectional title price increases were well above the consumer inflation increase, despite FTSE/JSE 40 outperformance.

Table 2: From 2010-2015, Mouille Point sectional title property price increases outstripped the FTSE/JSE 40 and consumer inflation.

Table 3: Atlantic Seaboard property price increases remain positive, despite rand weakness against the euro and US dollar eroding some gains, (Growth allows for depreciation.)


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