Sellers cash in on soaring demand for luxury apartments on the Atlantic Seaboard

Sellers of luxury apartments on the Atlantic Seaboard continue to cash in with exceptional capital growth yields amidst soaring demand, say Seeff agents, Adrian Mauerberger and Rosa Karp.

During the last year, some 71 apartments priced above R2,75 million have sold in the suburbs of Sea Point, Bantry Bay, Three Anchor Bay and Fresnaye; 27% more than the 56 units sold during 2011. While a number of units priced above the R10 million mark have sold, including two luxury Bantry Bay apartments sold by the agents for R21,5 million and R23,5 million respectively, the biggest demand is in the R3 million to R5million price range.

Sellers across all price bands have also achieved above average returns on their investments over the past year, add the agents. This shows that apartments here remain a sound investment, add the agents. Based on our 14 recent sales to the value of almost R112 million for example, sellers achieved an average annual capital growth of 27%. Many of these have been apartments that had been bought smartly, either in a sought-after complex or location or have been upgraded and resold at a healthy profit.

Fresnaye House is a good example of a secure development where residents enjoy shared facilities such as a gymnasium and swimming pool. Here, we sold a 147sqm, two bedroomed unit that was bought for just over R1,9 million about two years earlier for R3,1 million; yielding a 60% annual capital growth for the seller over the 2-year period. Yet another, is The Avenues where a 168sqm apartment with three bedrooms that was bought about 23 years ago for around R2,4 million sold for R4 million, yielding a 67% annual capital growth for the seller over the 23-year period.

While apartments sold in Sea Point, especially in beach front complexes such as Rocklands, typically yield a slightly more modest annual capital growth rate of between 7% and 8%, a 152sqm unit in La Ruth with three bedrooms that sold for R5,05 million, yielded an average annual capital growth of 33% over a 3-year period. The apartment was originally bought about three years ago for just under R3,8 million, renovated and consequently sold for an exceptionally healthy profit, add the agents.

Buyers have been a mix of local residents downscaling from houses on the Atlantic Seaboard and in the Southern Suburbs to a compact, lock-up-and-leave lifestyle along with holiday and investor buyers from Joburg and Durban. We have also seen an influx of African and European buyers. A Zimbabwean for example paid R3,75 million for a 168sqm apartment with three bedrooms in Dovehurst in Sea Point. Two German buyers recently invested in Sea Point apartments; the first is a unit in Pavilion Place that sold for R2,7 million against an asking price of R2,8 million and the second, an apartment in 188 On Ocean View that sold for R4,5 million against an asking price of R4,8 million.

This year is off to a positive start with around 25 sales to the total value of almost R172 million already recorded in the above R2,75 million price band; up by about 39% from the 18 units sold during the first quarter of last year, add the agents. Although demand is up and we are seeing a move towards a sellers' market, buyers are educated and aware of pricing dynamics and market value, say the agents.

What can you buy here right now? An exceptional investment is a 400sqm apartment in Bantry Place with stunning sea views, five bedroom suites, luxurious living areas, secure parking bays and storage facilities as well as a private swimming for R16,995 million. Yet another exceptional buy, is a 600sqm penthouse on the Sea Point beachfront that is on offer for R21,5 million. The open-plan living areas open onto a huge sky deck with breathtaking sea views and a private swimming pool. The apartment offers four bedrooms with en-suite bathrooms and vast formal living areas with a separate bar area. It includes two secure parking bays and a storeroom. Top class finishes throughout and panoramic sea views from every room.

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