Affordable accommodation inCape Town's CBD holds enormous potential for property developers looking for new opportunities, says Deon van Zyl.
Affordable accommodation in central Cape Town holds enormous potential for property developers looking for new opportunities, says Deon van Zyl, chairperson of the Western Cape Property Development Forum. He was addressing a Central City Improvement District event.
Before this can be achieved, developers need to understand trends and environments when it comes to rental affordability and changing legislation.
Van Zyl says the past year has been an “interesting period” for the property development industry.
Not only did the industry have to deal with the ripple effect of the changing international context, and the country’s cabinet changes and junk status downgrading, it also needed to still “get its head around” local regulation and planning changes within the city.
Specific to central Cape Town, other factors also need to be considered, Van Zyl says, including people having to travel distances to work in the city until they can afford properties closer to it, as well as the fact that people “who make the city work” are finding it difficult to live in the city.
Lifestyle choices, he says, make the CBD attractive, but “salaries are not supporting growth in rental prices”.
For these reasons, developers looking to bring new residential property into the CBD market need to be aware of where the market is, what it can afford, and what it is prepared to pay.
“But defining this universal concept of ‘affordable’, we need ourselves, as developers, to understand and get our heads around the concept of what we should, in a CBD, be calling affordable accommodation versus low-cost housing.”
Van Zyl says the “golden goose” over the past few years has been the residential sector, specifically refurbishments of commercial buildings into residential, and new constructions supported by the city’s change of view on densification.
“There is an incredible opportunity staring us in the face – affordable accommodation. If you could provide affordable accommodation close to work opportunity, you could charge a larger chunk of the available money for accommodation since travelling would be a lesser factor.
“Secondly, if you provide a quality product nothing prevents you from adding additional services, such as hospitality services in the form of laundry and catering services,” he says.
Van Zyl says this type of accommodation and service provision is already in places such as Dunoon, where rental for boarding house products exceeds R200/m².
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