Beach Road Property

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Property Market

Property values on Strand's Beach Road varies between the small and oldest apartments of +- R550 000 to penthouses of more than R10 million. One of the biggest property growth points in the Helderberg during the last 4 years has been the choice of new developments on Beach Road - elevating Strand to one of the choice beachfront lifestyle offerings in the Western Cape.

The high property capital growth cycle of 2003 - 2007 in the Strand dropped in 2008 along with the rest of the country - with buyers taking control of the market whilst banks reeled in the credit supply. Buyers who bought into the wave of beachfront developments during 2005 - 2007 on the expectations of a continued strong capital growth and the chance to speculate, have created a fair number of "willing sellers" during the 2008 - 2010 period. The international credit crunch has had a very negative effect on sales in Strand's Beach Road during 2008 and 2009. Strand Beach Road which had traditionally been either a second or retirement property haven, experienced a dramatic drop in sales volumes from its peak in 2005 and 2006. Prices in the "older blocks" however remained fairly stabile - despite the distressed sellers or speculators selling in the new developments for under the original developer's launching prices.

The surplus of available new development apartments on Beach Road since 2007 had suppressed capital growth on Beach Road during 2008 to 2010. According to CMA Info, there had been 46 sales in Strand Beach Road during the 2008 - that is about 4 sales per month. The volume of sales however (excluding inheritance) during 2009 grew to 86 transactions of which 25 were new developments and 61 were older complexes. Excluding all new developments registered, there was still a growth in sales volume of about 37% from 2008 to 2009 on Strand Beach Road - totally contrary to statistics from SAPTG which indicate that nationally sectional title (apartment) property priced between R300,000 to R5,000,000 reported an overall decline of 39% in transfers between 2008 and 2009. The average price per sq.m for the 61 registered sales in 2009 for all apartments older than 4 years on Strand Beach Road (i.e. excluding the new developments which occurred at a higher average price per sq/m) was about R12 900/sq.m whilst the new developments registered average prices in 2009 was R17 725/sq.m

Prices obtained in 2008 varied between R7 600 / sq.m (Strandsig) to R24 700 / sq.m (Cape Sands). The apartment prices in 2009 varied between R8 500 per sq.m (Welgelegen and Jacomahof) to R23 900 per sq.m (Hibernian Towers).

Beach front apartments were selling in 2003 from about R6 000 per sq.m to about R9 000 per sq.m.

The price structure of Beach Road properties can be roughly categorized in 4 different groups according to "age & finishes". The average price per square meter runs with some exceptions along with the 4 different complex groups.

Group 1 : Older than 20 years = R 8 500 to R13 500 per sq/m
Group 2 : 10 - 20 years = R11 000 to R15 000 per sq/m
Group 3 : 4 - 10 years = R11 000 to R22 500 per sq/m
Group 4 : New developments = between R18 000 and R30 000 per sq.m - depending on its finishes and the units location in the apartment block.

Group 1 :
Selling prices & therefore capital growth achieved do vary greatly with the level or quality of the interior finishes & renovation inside the older complexes - creating a situation where the per sq/m. prices obtained e.g. for the small St Tropez bachelor units is R25 600 per sq.m whilst another "larger & not renovated" unit sold from R10 500 per sq.m. The older not renovated units offers the best value for money as shown in Jacomahof where a 48 sq.m apartment sold for R600 000 in 2009. Other units were Welgelegen (113 sq.m for R1 000 000) & Blinkwater (98 sq.m for R1,35 million).

Group 2 :
This is probably the most sought after group of complexes - as the complex's locations generally tend to be in the better spots along Beach Road, whilst it still falls into the affordable price bracket for lifestyle property. (Grasso 80sq.m for R850 000 and Odeon 82 sq.m for R1 million)

Group 3 :
This group of complexes offers similar lifestyle & finishes than the new developments - but from a lower price bracket. (Metropole Plaza 113 sq.m for R1,4 million and Cap d'Azur 105 sq.m for R1,4 million)

Group 4 :
The oversupply of new development apartments on Beach Road during the last year, has led to below cost resales in new complexes like Atlantica & Ocean View, fetching between R10 800 to R18 100 per sq/m.

Despite this trend, the Hibernian Towers (8 sales @ R20 412/sq.m), Cape Sands (1 sale @ R19 200/sq.m) & Topaz (5 sales @ R19 040/sq.m) differentiated itself from the rest of the market. Distressed sales in Atlantica (2 sales @ R12 300) and Ocean View (4 sales @ 13 050) pushed down average/sq.m prices to way below the original developers prices.