Real Estate Investor Magazine South Africa REIM February 2018 | Page 13

W
ith each new year comes new snippets of advice
from experts regarding the best investment strate-
gies. 2017 Was a notoriously tumultuous period for
local investors, from state-wide corruption to Steinhoff scan-
dals. You’d be forgiven for being overly cautious about putting
your money anywhere other than under your mattress. But
2018 has started off on a cautiously optimistic note.
When it comes to property in particular, there are many
opportunities to be had. As Tony Clarke, MD for Rawson
Property Group points out: “Our property market is definitely
going through a period of contraction, but not all of that can
really be attributed to politics. We’ve been seeing a slowdown
in growth over the last 18 months. Ups and downs are a nat-
ural part of the property cycle, and certainly don’t mean there
are no opportunities out there. These kinds of transitional pe-
riods are an adjustment, but if you approach the market with
the right information on hand, there are still opportunities
to be found.”
According to ooba’s Q4 2017 statistics, 2017 was a tough
year for the property market. Group CEO, Rhys Dyer, ex-
plains: “The property market is significantly influenced by
sentiment and consumer confidence. Increased political un-
certainty, low economic growth and inflationary pressures
caused property buyers to ease off on new property purchases
during 2017. Reduced demand for property forced sellers
to adjust their prices to meet the demands of a more cau-
tious buyers’ market, resulting in negative price growth in real
terms when inflation is factored in.” But it’s not all doom and
gloom, he says: “We expect the new ANC leadership to de-
liver improved policy certainty during 2018. If this happens,
consumer sentiment will recuperate and boost demand in the
property market. This in turn will drive increased property
price growth over time.  We can then expect the year-on-
year property price growth to rise by 6% for the last quarter
of 2018, compared to only 1.4% compared achieved for the
fourth quarter of 2016.”
According to Dyer, the current market presents an oppor-
tune time to invest in property before the good news in the
economy factors into higher property prices. But where are
we supposed to look when it comes to choosing a property?
Luxury Property Trends
Andrew Amoils, the Head of Research at New World
Wealth, highlights several up-and-coming suburbs and
towns in the luxury market. These include Franschhoek,
Nature’s Valley, Zinkwazi, and Illovo. According to Amoils,
these are areas they’ve identified as increasingly popular with
HNWI investors. In addition, the research group has high-
lighted to top luxury apartment developments across the
country. These rankings were made based on several criteria,
including the design and space, maintenance, location, views,
security, activities and amenities, appeal to wealthy buyers,
and the quality of fittings. The top 10 for 2017 are as follows:
1. Whitehall Court
Located in Killarney, Johannesburg, Whitehall Court offers a
timeless design, impressive gardens, high ceilings, and excel-
lent finishes. Prices range between R3million and R12mil-
lion.
2. The Bantry
A beautifully designed complex in Bantry Bay, Cape Town,
The Bantry offers large units (all over 300 square meters) and
designs by architect Stef Antoni. Prices here come in at be-
tween R30million and R40million.
3. Melrose Arch
A unique mixed-use residential area, Melrose Arch in Sand-
ton includes apartments, offices, and shops. Residents have
easy and safe access to stores, bars, and restaurants. Prices
range from R2million to R30million.
4. San Michele
Located in Clifton, Cape Town, the complex overlooks Clif-
ton Beach. Beautiful designs and an unmatched setting, apart-
ments range from R3million to R30million.
5. Franklin Row
This development is located in Melville Road, Illovo. Featuring
a timeless design, prices range from R3million to R10million.
6. Michael Angelo & Raphael Suites
The complex is located in the heart of Sandton CBD, and of-
fers residents easy access to the Sandton City Shopping Cen-
tre. Prices range from R3million to R45million.
7. V&A Marina Apartments
Located next to the One & Only Hotel in Cape Town’s Wa-
terfront district, it boasts one of the most expensive address-
es in the country. Prices here fetch over R90,000 per square
meter.
8. The Pearls
A large residential development in Umhlanga, The Pearls
offers various units, ranging from garden apartments on the
beachfront, to sk y-rise penthouses. Prices come in between
R3million and R30million.
9. De Meermin
Overlooking Lookout Beach and the Lagoon in Plettenberg
Bay, De Meermin is the only Garden Route complex in the
top 10. Prices here range between R3million and R10million.
10. The Bermudas
A well-established development in Umhlanga, The Bermudas
offers both garden apartments and high rise units. Well-man-
aged and comprising internal gardens and an impressive pool
on the upper levels, the complex also has easy access to the
beach. Prices range from R3million to R10million.
Amoils highlights that they have seen a global shift from
traditional luxury apartments towards hotel residences: “This
refers to apartments in existing hotels that can be purchased.
They essentially allow owners to live in a hotel permanently
and enjoy the same services as normal guests do: room service,
dining, and cleaning.” Examples of the hotel residence model
in South Africa include The Houghton in Johannesburg, Cape
Royale and Taj Residences in Cape Town, and the upcoming
Oceans Hotel Residential Apartments in Umhlanga.
Affordable Market
While the luxury market trudges on, seemingly in its own
bubble, most real estate investors are looking towards a much
more affordable class of property. Clarke explains that the low-
er end of the property market will likely experience the high-
est growth in the year ahead: “We’ve already seen this trend
making its impact felt over the course of 2017, with properties
valued under R1m seeing far stronger price growth than those
over the R1m mark. There are, of course, areas that buck this
trend and show excellent price growth in other value bands,
but on average, we do expect affordable property to outper-
form the rest in 2018.”
Leanne Govender, sales manager at Nedbank CIB Property
Finance, highlights affordable housing as an area in need of
innovation: “Much more impactful affordable housing part-
nerships need to be established between the country’s public
and private sectors. Property financiers, developers, and inves-
tors need to work with the government to find solutions to
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