Market Review: JANUARY TO MARCH 2022

Market Review: JANUARY TO MARCH 2022

Category Property Investment

Overview

Has the Cape Town property market turned? Is it recovering? Activity in the first quarter of 2022 for many agents across the City Bowl and Atlantic Seaboard would suggest that we are finally coming out of the bottom of the property cycle. In the course of my daily business I speak with colleagues from other real estate agencies, large and small, and the conversation has been fairly consistent over the last few months. We are all seeing an increase in buyer activity, with a sense of more focussed, serious buyers, both local and international, in the market to buy. Properties that, in many cases, have sat on the market for many months, are now starting to sell, with buyers making quicker decisions to make offers, once they've viewed. Conversations with Mortgage Bond originators and conveyancing attorneys also tell a similar story - more transactions, more business, relative to last year. It does seem that there is more movement in the market, with a sense that the number of sales taking place is increasing. An upward trend in values should follow on.

There has definitely been a more buoyant business mood in Cape Town over the summer season, as visitors from overseas return to Cape Town. The building cranes are evident once more across the Cape Town skyline too. Incidentally, residential property rental values have also made a distinct recovery since December 2021. All of this will, no doubt, continue to be debated over coffee in the cafes of Cape Town. There will always be a range of views, and ultimately time will tell if the market maintains an upward curve. For now, it seems, we have reason to be optimistic about the positive signs of recovery and better times to come as we head into the second quarter of 2022.

Below is an overview and analysis of the data and market for Sectional Title Residential (apartments) for four property suburbs. CMA Info, as always, reflects sales mostly occurring in the previous quarter, which have registered in the Deeds Office this quarter. PropStats reflects sales as they are signed and suspensive conditions are fulfilled, therefore showing a more immediate picture of sales. Whilst many agencies register their sales on PropStats, it is not used by all agencies, so reflects some, but not all, sales taking place. Actual numbers of sales taking place recently will therefore be higher than the figures reflecting on PropStats.

Richard Boxford, Kinesis Property.

NOTE: All table data is extracted from CMA Info which is drawn from the Deeds Office. Additional data source: Prop Data and Property24.

City Centre

The City Centre (Central Business District) continues to show signs of having plateaued at the bottom of the property cycle and moved into recovery. Buyer activity is increasing, and the under R3m segment of the market continues to dominate the sales that are occurring. The first quarter of 2022 has seen a minimum of twenty-three apartment sales, as identified on PropStats. In more general terms the central city has very much come back to life, with office workers returning to the office, and retail revitalising. The developments, both commercial and residential, that have now 'broken ground' has undoubtedly boosted confidence in the city centre, and aided a regenerating property market. Property owners wishing to sell can expect well priced properties to move more easily than in 2021. The number of apartments listed for sale on Property24 at the end of March was 929, with just under 600 of these under R2,5m. At any given time in 2021 there were 1,000 +/- apartments listed for sale on Property24 for the city centre. The reduction of active stock in the market of around 7% is a good sign and indicative of more properties starting to sell.

Foreshore

The Foreshore precinct remains relatively quieter in terms of sales volumes, although it has a smaller inventory of apartments than the central city. Sales values remain broadly in line with those for last year. The PropStats data for the first quarter includes the sale of a 125m2 apartment at Silo 3 for R10m. As at the end of March there were 99 properties listed for sale on Property24 in this residential node. This has not changed significantly and suggests a slower closing of the gap between supply and demand in the Foreshore.

De Waterkant        

In 2021 the De Waterkant residential market was less buoyant than some other residential nodes. It seems that it may be catching up, with the first quarter of 2022 PropStats data showing a healthy number of sales relative to the same period last year. The over R3m segment of this market has also improved, with more sales taking place above R3m than under R3m. Rand per m2 values are steady, whilst properties that have been on the market longest generally have sold at higher reductions. At present there are over 170 residential properties listed on the market for sale, with nearly two thirds of those in the over R3m segment. So, supply and demand levels are broadly aligned, as buyers look higher up the price range.

The Waterfront

The Waterfront (V&A Marina) has had a quieter end to 2021 and start for 2022. As always, it is a niche property market, with a slower turnover generally than other residential nodes. It does however, remain a stable market with both average selling prices, R/m2, and days on market being consistent. At present 43 properties are listed on the market for sale in The Waterfront on Property24.

PROPERTIES WANTED

I am currently looking for properties to sell in all residential areas across the City Bowl, City Centre, De Waterkant, Foreshore, The Waterfront, as well as The Atlantic Seaboard and Woodstock. If you, or anyone you know, would like an up to date, free, no obligation valuation on a property, please do not hesitate to contact me on +27 (0) 81 063 1871. Please feel free to contact me at anytime to discuss your property requirements, including both sale, long term rental, short stay letting, and buying. I am available by appointment seven days a week between 8am and 8pm to assist with all your property requirements. I can be reached via Whatsapp on +27 (0) 81 063 1871, or email at: richard@kinesisproperty.co.za

Author: Richard Boxford