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- November
Strand Beach Road Property Market – first Semester 2010
Posted: 16th August 2010
This better than national sectional title sales figures is attributable to the area offering much better value per square meter than the similar property offerings on e.g. the Cape Atlantic seaboard. The buyers interested in Strand Beach Road is also buying with a long term view – mostly viewing the property as their second home to be converted into their retirement home. Only 7% of the registered sales of apartments older than 3 years on Beach Road has during 2010 been for less than present comparative property values per square meter – a sign of a solid market that escaped the storms of 2008/9 relatively unscathed.
The availability and affordability of credit coupled with the surplus of available new development apartments on Beach Road since 2007, had suppressed capital growth 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 in the Deeds Office, 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. The first semester of 2010 has seen a continuation of the growing sales trend on Strand Beach Road with 41 sales being registered according to SAPTG in the Deeds Office of which 14 were new developments built since 2008 (e.g. Hibernian Towers and Topaz). The average price per sq.m for the registered sales in the first semester of 2010 for all apartments older than 4 years on Strand Beach Road (i.e. excluding the new developments) was about R13 462/sq.m . The new developments average registered prices in 2010 have been ranging between R12 686 per square meter for Ocean View to R23 225 per square meter for Topaz.
Total registered sales for the first semester of 2010 for the 4 new developments on Strand Beach Road had been R 30 524 151 at an average of R15 439 for the 1977 sq.m. sold. That is about 13% lower than the average registered sales prices achieved for new developments during 2009 of R17 725 per sq.m. Interestingly enough – there has only been about a 13% difference in average prices obtained (registered) between older apartments and new developments (less than 4 years old) during the 2010. The present price structure of Beach Road properties can be roughly categorized in 4 different groups according to "age, finishes and size". The smaller the apartment, the higher the price achieved per square meter. The quality of sea view also has a big effect on the property’s value.
The average price per square meter runs with some exceptions along with the 4 different complex age 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. 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. Beach Road property in general has not been subjected to the same forces which have been experienced in e.g. the buy-to let investor property sectors where capital growth has seen fairly substantial drops. The growing foreclosure or bank repossessions trend created during 2008 / 9 and during the first semester of 2010 effected a strong downward pressure on prices obtained in the buy to let property market.
Some auctions at the entry level investor sectional title market (priced at up to R450 000) have towards the end of 2009 seen prices drop by as much as 50% of what was the perceived value of the property in 2007. Auctions on Beach Road have however been a very small part of the transactional horizon and were therefore not a distinct negative capital growth factor at all. Only a few distressed sales in some of the new developments took place - without any real effect on the rest of the older blocks, where most of the owners opted to keep their apartments from the market – especially if they did not need to sell. From the 27 sales which had been registered in the Deeds Office during the first months of 2010, only two transactions took place at prices which seem to be much lower than other comparative properties per square meter – a Romilly apartment @ R8 426 per square meter and an apartment in Strandsig @ R7 432 per square meter.
Only 7% of all transactions on Beach Road during 2010 amongst the older than 4 year old apartment blocks had been registered for much lower than comparative market value – confirming stability in the Strand Beach Road property market. The last 2 years has been a sobering period for all property owners in the country – including Beach Road Strand. The unrealistic capital growth expectations have been tempered to pre-2003 growth levels. Although apartment prices got far “out of touch” with incomes levels during the boom, it is to be expected that inflation will in the next few years close this gap considerably.
Strand Beach Road has during the last few decades always operate on an eight to ten year tide pattern – with surges of new developments coming to our shores every eight to ten years. Buyers who are waiting for Beach Road prices to drop are doing it at their own peril. This is not anymore a time for fence-sitting. Those who are qualified homebuyers or those who can afford to buy their retirement property – beware, the sands (of Beach Road) are “running out”.
For more detailed analysis of the different suburbs in the Strand such as Strand North, Kleinbos, Goedehoop, Onverwacht (Die Bos), Strand Central and Strand South, please visit www.cch.co.za .
Benhard Wiese
Principal Associate,
CCH (Cape Coastal Homes / City Country Homes)
benhard@cch.co.za /
084 6112293 / 021 851 1951(O)
The availability and affordability of credit coupled with the surplus of available new development apartments on Beach Road since 2007, had suppressed capital growth 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 in the Deeds Office, 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. The first semester of 2010 has seen a continuation of the growing sales trend on Strand Beach Road with 41 sales being registered according to SAPTG in the Deeds Office of which 14 were new developments built since 2008 (e.g. Hibernian Towers and Topaz). The average price per sq.m for the registered sales in the first semester of 2010 for all apartments older than 4 years on Strand Beach Road (i.e. excluding the new developments) was about R13 462/sq.m . The new developments average registered prices in 2010 have been ranging between R12 686 per square meter for Ocean View to R23 225 per square meter for Topaz.
Total registered sales for the first semester of 2010 for the 4 new developments on Strand Beach Road had been R 30 524 151 at an average of R15 439 for the 1977 sq.m. sold. That is about 13% lower than the average registered sales prices achieved for new developments during 2009 of R17 725 per sq.m. Interestingly enough – there has only been about a 13% difference in average prices obtained (registered) between older apartments and new developments (less than 4 years old) during the 2010. The present price structure of Beach Road properties can be roughly categorized in 4 different groups according to "age, finishes and size". The smaller the apartment, the higher the price achieved per square meter. The quality of sea view also has a big effect on the property’s value.
The average price per square meter runs with some exceptions along with the 4 different complex age 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. 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. Beach Road property in general has not been subjected to the same forces which have been experienced in e.g. the buy-to let investor property sectors where capital growth has seen fairly substantial drops. The growing foreclosure or bank repossessions trend created during 2008 / 9 and during the first semester of 2010 effected a strong downward pressure on prices obtained in the buy to let property market.
Some auctions at the entry level investor sectional title market (priced at up to R450 000) have towards the end of 2009 seen prices drop by as much as 50% of what was the perceived value of the property in 2007. Auctions on Beach Road have however been a very small part of the transactional horizon and were therefore not a distinct negative capital growth factor at all. Only a few distressed sales in some of the new developments took place - without any real effect on the rest of the older blocks, where most of the owners opted to keep their apartments from the market – especially if they did not need to sell. From the 27 sales which had been registered in the Deeds Office during the first months of 2010, only two transactions took place at prices which seem to be much lower than other comparative properties per square meter – a Romilly apartment @ R8 426 per square meter and an apartment in Strandsig @ R7 432 per square meter.
Only 7% of all transactions on Beach Road during 2010 amongst the older than 4 year old apartment blocks had been registered for much lower than comparative market value – confirming stability in the Strand Beach Road property market. The last 2 years has been a sobering period for all property owners in the country – including Beach Road Strand. The unrealistic capital growth expectations have been tempered to pre-2003 growth levels. Although apartment prices got far “out of touch” with incomes levels during the boom, it is to be expected that inflation will in the next few years close this gap considerably.
Strand Beach Road has during the last few decades always operate on an eight to ten year tide pattern – with surges of new developments coming to our shores every eight to ten years. Buyers who are waiting for Beach Road prices to drop are doing it at their own peril. This is not anymore a time for fence-sitting. Those who are qualified homebuyers or those who can afford to buy their retirement property – beware, the sands (of Beach Road) are “running out”.
For more detailed analysis of the different suburbs in the Strand such as Strand North, Kleinbos, Goedehoop, Onverwacht (Die Bos), Strand Central and Strand South, please visit www.cch.co.za .
Benhard Wiese
Principal Associate,
CCH (Cape Coastal Homes / City Country Homes)
benhard@cch.co.za /
084 6112293 / 021 851 1951(O)
Posted by: CCH (Cape Coastal Homes)
