Changing buyer demographics bodes well for Atlantic Seaboard property market

Buyers of residential property on the Atlantic Seaboard are getting younger and given that these buyers are likely to trade up in the next few years, this bodes well for the future of the market here, says Seeff's managing director for the areas, Ian Slot. 

A detailed analysis of the buyer and seller demographics here over the last twelve years, shows a clear shift in the buyer demographics from being overwhelmingly in the 35-plus age group pre-2008 to the 18-35 age group that now makes up about a quarter of all buying here, he says.

4 Bedroom Townhouse for sale in Camps Bay

Market activity on the Atlantic Seaboard has improved steadily year-on-year from the post-recession hangover lows in 2009, driven by a combination of factors including an increase in buying by the under 35-age group, says Slot. Sales volumes here dipped to just 992 sales to the value of about R4,3 billion in 2008, down by 45% from the 1,795 sales transactions worth almost R8,4 billion in the preceding year. By last year, this had almost doubled since 2008 to 1,962 sales transactions.

While this recovery has been aided by more buying in the upper price band of between R5-R10 million and a resurgence of demand above the R20 million price band, there was a definite boost by younger buyers, he says. This generational transformation is driven largely by a desire for the lifestyle, but has also been aided by semigration into the area, especially younger buyers from Gauteng. FNB's semigration statistics also show that the Western Cape remains amongst the best performers when it comes to net migration levels, driven primarily by an aspiration for the Cape Town lifestyle, says Slot.

In Sea Point for example where buyers were predominantly older in previous years, about 104 sales over the last year were to the under 35-age group, up by 20% from the 87 sales in 2012, continues Slot. Even in Camps Bay, we are seeing younger buyers entering with about 12 sales to the value of almost R58 million last year to younger buyers compared to just 6 sales in 2012.

Looking ahead, the changing demographics bodes well for the future of the property market here and is set to drive the next property cycle, continues Slot. Rather than older buyers selling off their bigger homes and downscaling for retirement reasons, we are likely to see this younger buyer demographic trade up in the area as they will look to acquire bigger homes to meet their changing lifestyle needs. Starting a family for example is likely to see the owner of a small Sea Point apartment trade up to a bigger apartment, a freehold house or possibly even a villa in suburbs such as Camps Bay, Fresnaye, Bantry Bay or even Clifton.

1 Bedroom Apartment for sale in Sea Point

While younger buyers are more susceptible to economic fluctuation, especially where they require some form of mortgage finance assistance, buyers on the Atlantic Seaboard are somewhat more resistant to economic hiccups and mild inflationary swings, says Slot. Rather, those that are able to do so, are taking advantage of the favourable buying conditions to get a foothold in the market here and, this will stand them in good stead in years to come.

The continued strong performance of the Atlantic Seaboard property market, means that those that are investing in property now will benefit from strong capital growth over the next few years, thus providing an added boost when the time comes to sell and upgrade, says Slot. While, based on the current economic climate, the average nominal growth rate on the Atlantic Seaboard is likely to remain relatively flat at 7-8% over the next 2 to 3 years, history has shown that the area has the propensity for significant capital growth.

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