PROPERTY &
In the latter half of 2019 the Atlantic Seaboard in general, and Sea
Point in particular, saw scary headlines about ‘slow decline’ or
outright ‘carnage’ in the property market. But while average prices
on the Atlantic Seaboard did indeed decline by 5.1% year on year
in Q1 2019, most of the hurt was felt at the top end of the market.
Investors would be far more interested in Wesgro’s report, which
found that over the 10-year period from 2008 to 2018, Sea Point
reported 300% year-on-year growth in the freehold sector and 200%
year-on-year growth in the sectional title sector. No other part of
Cape Town – not neighbouring Green Point, not the City Bowl, not
the Southern or Northern Suburbs – saw growth numbers nearly as
strong as that.
Investors should know that when it comes to rentals, the area is
overstocked. As Seeff noted in its prediction of 2020 trends: ‘The
Cape rental market continues its excellent performance, although
there are some overstocking issues that persist in certain areas,
including those caused by the high rate of development in areas
such as the CBD.’
Yet, for now, occupancy figures and the talk around the
neighbourhood suggest that short-term rentals are offering
attractive returns. In January 2020, PR firm Irvine Partners indicated
that owners of one-bedroom apartments at Green Point property,
The Romney, had achieved average occupancy of 77.1% over the
previous 12 months, and average monthly revenue of R34,026. ‘Twobedroom
apartments have an occupancy rate of 75.9% and monthly
revenue of R45,700,’ they noted. ‘That equates to an attractive
average rental/income yield of between 9% and 12% a year.’
COVID-19 and the short-term rentals uncertainty
Investors should, however, keep an eye on the short-term rental
economy. Sea Point has numerous short-term rental properties,
managed through systems like Airbnb, and the market is an obvious
option for those who’re interested in this type of investment.