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Apr 4, 2013 1:55:24 PM

Northern suburbs property greets 2013 with positive growth

Topics: Residential, South Africa 0

Property prices in Cape Town’s northern suburbs are finally showing positive capital growth – the first time since 2008.

That’s according to Etienne Labuschagne, Principal of Harcourts Select, one of Harcourts Real Estate SA’s newest members.

Labuschagne, who heads up a team of 20 qualified “cherry picked” estate agents, says house prices in his area of operation, which comprises Bellville, Durbanville, Brackenfell, Kuils River, Parow and Kraaifontein amongst others, are showing growth of around 5% year-on-year. This he attributes to a number of factors, not least of all that the recession is receding, a belief supported by his company’s record turnover last year, after doubling its 2011 sales volumes.

However, he points out, buyers are still extremely price conscious and affordability therefore remains fundamental to continued market momentum. This is one of the reasons for the growing popularity of the area, which he says offers better brick-and-mortar value for money than its southern counterpart.

“Consumer price-shyness has catapulted the northern suburbs into the Western Cape’s real estate spotlight, owing to its competitively priced offerings,” he says. “On average, properties in the northern suburbs are about 20% less expensive than those in the south. You can buy a two bedroom apartment for R450 000 in Parow. The same flat on the southern side of Century City, which effectively divides the two areas, would cost about R550 000. Similarly, a neat three bedroom family home in Oakdale, Bellville will cost on average about R1m whereas in the southern suburbs you’ll struggle to find anything for under R1.3m. Even our mansions, which have price tags of up to R30m, offer better value per square metre.”

The second local market driver is lifestyle quality. “Today’s buyers are increasingly aware of the link between location and capital growth,” he says. “They’re looking further into the future than previous generations did and making considered, well thought out buying decisions with the focus on lifestyle combined with value growth. The northern suburbs, which still fall under the City of Cape Town municipality, are conveniently located within a 25 to 35 kilometre range of the city centre and close to highways and the airport, yet they offer a tranquil, more natural alternative to commercialised big city living.”

The growing popularity of the area is further underlined by a high rate of new development, particularly on the north eastern side. Labuschagne expects this “north east growth corridor” to be fully developed within the next ten to fifteen years, not least of all because it’s the last vacant land in the greater Metropole. “Everywhere else is bordered by the sea or agricultural land so there is nowhere else to go but here,” he explains.

As a result, suburbs such as Kraaifontein, which sits at the entrance to a number of wine routes, have become vibrant hubs of new building activity such as the award-winning R1,5 billion Buh-Rein lifestyle estate. Spread out over 87 hectares of reclaimed land, the estate will, on completion, comprise more than 3 200 apartments, 133 freestanding homes and 137 townhouses as well as a shopping centre, school, medical centre, take away, petrol station, sports field and 20km of cycling and running paths. Priced from R450 000 to around R1,5m, its residential units are selling quickly, which Labuschagne attributes to its entry level and middle class affordability as well as its focus on healthy outdoor living.

“There’s a very positive feeling in the market place at the moment, not least of all because the banks are granting loans more easily,” he continues, “which is why properties, particularly those in the lower to middle price ranges should sell within the first month of listing. The buyers are out there, so if a home isn’t selling, it’s either because of a lack of area knowledge and marketing skills by the listing agent, or it’s over-priced.”