Developers and investors looking to launch residential properties in Cape Town this year should carefully evaluate their target areas to ensure they meet demand.
Rabie Property Group’s John Chapman says some of the older, well-located areas are ready for “brownfield” redevelopment opportunities, and there appears to be insufficient student accommodation near colleges.
For developments on the cards for 2019, he predicts there will be a big focus on IT infrastructure, and a move towards smart metering as the cost of utilities increases above inflation rates.
Security embracing new technology is also essential. He foresees new apartments built in good areas this year to become smaller to reduce the capital costs.
Other than going green, Bill Rawson of Rawson Developers says not much has changed in the property development offering so far this year, but he believes the high cost of electricity and water will result in bids to reduce these by installing solar heating and water-recycling devices.
Property developments likely to see good returns currently and in future are those close to work opportunities as they will reduce the cost of transport.
“Those that offer fibre-optic connectivity and a laundry, swimming pool and gym are also popular. The more amenities featured, the higher the demand.”
The demand for mixed-use developments is higher than ever, says Nicholas Stopforth, managing director of Amdec Property Developments.
“We are attracting young professionals into mixed-use precincts who understand the live-work-play features. And we have investors who are scaling down and looking for a safe and secure precinct.”
Stopforth says the rising demand for mixed-use developments in new urban precincts can be attributed to various factors:
- A solution to high-density living in the city centre.
- Safety and security.
- The ability to live, work and play in the same precinct.
- Sustainable development and the inclusion of water-efficient technologies.
FWJK’s Dave Williams-Jones says features such as on-site creches, gyms, workspaces, storage and pool/entertainment areas are attractive.
Areas in Cape Town that have gaps for further residential development include the Atlantic seaboard and locations near the inner-city.
He says: “FWJK likes developing in hot sectors, like the city centre of Cape Town and decentralised areas such as Woodstock, Sandton and Rosebank in Joburg, and Umhlanga in Durban.”
He believes developers need to be working in the affordable housing market this year to assist with the provision of housing “where demand remains the highest of all the housing sectors” in the country.
Expert predictions
GOING GREEN Eco-friendly housing will be on the radar of developers both this year
and in the future. Picture: Supplied
Developers will be keeping their fingers on the pulse of property market trends to ensure they invest in the correct products. Adrian Goslett, regional director and chief executive of Re/Max of Southern Africa, predicts that the factors that will dominate the real estate market this year and be on the minds of developers, will include:
◆Increased demand for sectional titles The South African deeds office recorded a 3.6% drop in the number of freehold properties sold in the fourth quarter of 2018, and a substantial 8.1% increase in the number of sectional title units sold.
◆Sustainable eco-friendly housing Goslett says last year’s water crisis in the Western Cape shone a spotlight on sustainability and environmentally responsible ways of living.
“The ever-rising cost of living and looming threat of national electrical outages provide prudent reasons why homes with sustainable features are likely to become increasingly attractive.”