Residential property boom in CBD

Residential properties around the CBD and the V&A Waterfront are being snapped up as the demand for city living increases.

The R1.2 billion Yacht Club development at the gateway of the V&A Waterfront was recently sold out with construction only set to be completed in mid-2018.

Pam Golding Properties area specialist, Mariel Burger, said the sellout-success of the Yacht Club shows the growing demand for urban living options in the city centre and neighbouring precincts, especially as the surrounding developments near completion.

“In the adjacent V&A, the price of Waterfront apartments has escalated by 85 percent from 2013 to date.

“The Marina, which was one of the first Waterfront residential developments, is selling from
R70 000 per square metre on the canal to R123 000 per square metre on the front of the yacht basin.”

The Yacht Club development sell-out comes after the news of plans for R3 billion worth of development for the city centre (“R3.8 billion property boom for CBD, CapeTowner, October 13 2016), all of which are either mixed-use developments or apartment blocks.

The last units sold off plan for more than R3 million for a one-bedroomed unit to R5.3 million for a two-bedroom apartment, he added.

According to the Central City Improvement District (CCID), which conducts an annual survey of people living in the city, since 2005, the number of people living in the city has increased by 900 percent – from about 750 people to 7 000 people.

CCID chairman, Rob Kane, said that apart from the fact that the central city has become a cleaner, safer and more vibrant place, businesses began to reinvest in the area around 2008.

“But we really attribute the turnaround in terms of residential to the 2010 FIFA Soccer World Cup. This is when locals really began to return to the CBD when they saw how much better it had become, and it became an option for people beyond just being a place for work or study,” he said.

“In the mid-2000s, many developers turned their sights onto the CBD and that’s when the majority of the approximately 3 500 residential complexes were built. But just as the international property market saw its bubble burst in the late 2000s, so did Cape Town, and quite a number of units then either sat on the market for many years, remaining unoccupied, or saw investors selling units below what they had originally paid for them.”

He said post world cup, people really began showing interest in the CBD as a residential option and since then, there has been strong year on year growth in the sales of units that existed as well as the development of additional units.

Suhail Desai, sales agent at Life Residential in the CBD, said the demand for inner city housing is so high because of tourism in the city centre and the V&A Waterfront.

“Tourists are attracted to the property market because there is so much to see and do and it is central. We work with many international clients who invest in the city centre. The demand is especially high when it comes to development, because people can buy and they will be the first owners of the property. They have the option of selling it for much more or rent it. Another factor is also the short-term rentals because of holidays and short stays in the CBD.”

He said he had a unit in the city centre which sold in three days. “Property is being sold out so quickly. I have concluded many short-term rentals over the peak season.”

However, he said, property in the Waterfront is in higher demand because it is prime residential, retail and commercial space. “Its the view, the marina and it is close to everything.”

Remax sales agent Susan Watts, said the facilities available to residents in the city are constantly being upgraded and there is an emphasis being placed on improving public transport systems. “The inner city is a fantastic place to live. The ocean is ‘just over the hill’, there are an endless selection of world class restaurants, coffee shops and the V&A Waterfront is just around the corner should you be in need of retail therapy. The city literally caters to everyone.”

She said all areas of the City Bowl are in great demand. “If a property is priced correctly it will sell in a matter of days. Buyers are well versed in property pricing in the city and over pricing can cause a property to sit on the market for an unnecessarily long amount of time.

“City centre property demand has also increased with blocks such as Mutual Heights, where we have recently sold several units, and The Taj fetching record prices.”

However, the competitive nature of city living controversially stretches beyond buyers and developers, with lower income groups also fighting for social housing opportunities in or near to the city centre with the assistance of campaigns such as Reclaim the City.

Hopolang Selebalo of Ndifuna Ukwazi, a non-profit organisation in Roeland Street which supports the Reclaim the City campaign, said there is a severe shortage of houses in Cape Town. A lot of people live in private residential stock and often faced evictions, she said.

“The private property sector is highly competitive and an average person cannot afford to live there.”

She said people with low to middle income also prefer to live near to the city centre because of convenience.

“I don’t really understand the idea that there cannot be social housing opportunities in the city centre. It’s been proven in other cities where people with lower to middle income are accommodated, like in cities like New York and London for instance.

“There should be consideration for poorer people. There should also be space for rezoning areas in the CBD where they can make space for people with low to medium income. It’s not impossible.”

Mr Kane said: Affordable housing is something that he would like to see in the Cape Town CBD, particularly when you realise how far so many people who work in the CBD travel to come to work, and how much of their disposable income is spent on transportation.

“We also believe a downtown needs a vibrant economic mix of full-time residents who actually live in the apartments, as opposed to a possible ghost town of apartments used only for end-of-year holidays.

He said the CCID team is excited about the call for submissions on the Foreshore Freeway project, which is insisting on at least some portion being social housing.

However, Mr Desai, in his personal opinion, said social housing would be unfair in the CBD where some people had already owned land for a while.

“They work hard for their investments. Now, the market is booming and it’s selling like hotcakes, so there is no space for social housing in the CBD. I agree that people should have social housing close to the CBD, but not in the city centre. “It’s a tourist destination, it’s a thriving market, and we want to keep it like that.”