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High prices drive Capetonians to northern suburbs

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Cape Town’s northern suburbs were once out-of-favour, but recently they have become a favourite flavour

Former city dwellers – and even Atlantic seaboard and southern suburbs residents – are increasingly looking for homes in Cape Town’s northern suburbs as they search for more affordable property and better value for money.

Quality of life and location are also among the reasons these previously out-of-favour suburbs are now attracting increasing numbers of semigrating residents. “Invariably it comes down to either a desire for a more favourable location, better investment value compared to other suburbs, or a combination of the two,” says Johannes van den Berg, principal and sales director at Just Property N1 City.

In addition to its central location making commuting to work “simple” for most people, tenants and homeowners in the northern suburbs can also, within a relatively short drive, find themselves at prestigious wine farms and breathtaking hiking trails, Van den Berg says.

“Property prices stand out as more affordable if compared to the southern suburbs in general, where per square metre value makes property in the northern suburbs cheaper. You get more for less and that is why Cape Town’s northern suburbs remain in high demand.”

Those who have already moved to the northern suburbs, or are looking to, are “from all over”, Van den Berg says. The majority hail from areas with similar features such as schools, shopping malls, business hubs and other amenities.

“Whether moving nearer to the CBD or further away, property attributes offered in the northern suburbs generally attract any buyer looking to settle down while being located well enough to easily reach wherever their interests lie.”

Egbert Meyer, Chas Everitt International area specialist for Durbanville, believes “we are at the beginning of quite a trend”, and he is expecting to see this reflect in more semigration sales next year. Rowan Alexander, director of Alexander Swart Property, says during the recent months of economic turmoil, these suburbs have proved to be among the “most stable” of Cape Town’s home markets. 

“Price growth here has been consistent and has not undergone the big price drops seen this year in the Atlantic seaboard and other high-end suburbs,” says Alexander. Recent figures from Lightstone show that 32% of homeowners in Durbanville – which Alexander says is “arguably the Cape Town northern suburbs’ most prestigious and popular suburb” – have been there for less than five years.

But despite the northern suburbs’ pull factor, it is difficult for people settled in areas like the southern suburbs to uproot their families, especially if they have school-going children, says Meyer. The cost of moving is also high so the move would need to offer them “considerable savings”. This includes, for example, time and fuel saved travelling to work, or being able to acquire more property for less money. “However, there has been a definite increase in the number of prospective buyers from the southern suburbs visiting our show houses in the past few months, with the main attractions being our excellent schools, modern homes that are often good value for money, and the relaxed lifestyle. 

“People also like the idea of secure estate living and this is relatively affordable in the northern suburbs, especially around Durbanville.” 

First buy: From tenant to owner

Wendyl Martin, news editor, Weekend Argus, Sunday, talks about his move north: 

A few years had gone by without seeing much grass, children or dogs. Earlier this year, I woke up in my 30m² spinster flat (the bathroom basin had no mirror over it) and felt the rent wasn’t worth it. My rent came in under R6 000.

I had a kitchenette, a bathroom, a main room and a balcony. When I moved into the apartment in Green Point in 2014, the rent was around R3 700. The property search had been ongoing for years. As I continued to look, prices kept going up steeply, and I kept shifting my focus out of the city: first to Woodstock and Salt River, and then further north. I am a career immigrant to this city, with no inheritance or trust fund.

Owning property is very important to me. I began to reason that Goodwood and Parow offered value-for-money property in terms of size and price, public transport via two rail lines and Golden Arrow bus services and amenities such as major shops, gyms, cinemas and other entertainment.

Being a wine drinker, I’m am now also a few turns away from several wine farms in the Durbanville wine valley. I purchased a two-bedroom semi-detached townhouse (maisonette for some Capetonians) and I still very happy about the purchase, almost joyful.

From living in a flat, I now wave good-bye to people from a front door as they pull away from my tiny driveway. I enjoy the little things in the townhouse: having a courtyard with washing lines, an outside tap, waking up in a bedroom, and even being neighbours to families.

New urban” lifestyle at a much lower cost

Many first-time buyers would love to live in the regenerated Cape Town CBD or a trendy inner suburb like Woodstock, Observatory, or Rondebosch, says David Britz, sales and marketing director of property developer Multi Spectrum Properties.

But for most of them, the entry-level prices in these areas are “just too high”, making areas like the northern suburbs increasingly attractive. “As for investors, those who got into these markets five years ago have done very well in terms of capital growth and are enjoying good rental yields. But many who are contemplating new buy-to-let purchases now are finding that the potential returns over the next five years are not as good because of the relatively high purchase prices.”
While both groups are looking for alternatives in the Western Seaboard, to a much greater extent they are looking to the northern suburbs, Britz says. Here new developments like the Buh-Rein Estate, offer all the advantages of the “new urban” lifestyle at a much lower cost.
“There are also scores of developments going up in northern areas like Brackenfell, Kraaifontein and Kuils River, and it has been estimated that up to 40% of buyers in these areas are first-timer. This is in sharp contrast to the first-time buyer percentage in Cape Town as a whole, which FNB has estimated at under 10%.”
Good development corridors have an uplifting effect on established suburbs next to, or near, them, adds Alexander Swart Property’s Rowan Alexander. They often complete the enclosure of existing suburban areas and the consequent lack of expansion opportunities, and new land inevitably raises the value of existing stock in these areas. “At the same time, the higher prices and more modern designs of the new stock coming on stream in the adjacent areas also raise the value of the older stock nearby. It can pay, therefore, to buy in an established area alongside where good new developments are taking place or will take place.”

Value for money: Estate life popular
A further indication of the popularity of estate living in these suburbs is that homes in the northern suburbs’ Burgundy Estate totalling more than R1.2 billion have been sold by the Rabie Property Group over the past three years. 

Major developments include an office park, retirement village, free-standing homes, and additional rental stock is on the cards, says Brian Usher, sales director of Property World, the dedicated sales agency for Rabie’s new developments. The northern suburbs still tend to offer value for money, particularly given the wide array of facilities such as schools, shopping centres, restaurants and community events it offers, says Rabie director Collin Green.

The group’s Burgundy Estate development is no exception. “Burgundy Estate is where Century City was about 10 years ago and we expect to see the same capital appreciation there that Century City has enjoyed over the past decade.”
Upliftment: Think long term
Some northern suburbs corridors which can expect upliftment include: The territory bounded by the Wellington Road corridor to the east of Durbanville. This includes the existing suburbs of The Crest, Uitzicht, Graanendal and Durmonte. The areas north of Kraaifontein.
The relevant suburbs likely to be affected here by development on their fringes are Bonnie Brae, Bonny Brook and Langeberg Heights. The Bottelary corridor to the east of Brackenfell. The precincts that will probably be affected here are Brackenfell South, Amandelrug, Rouxville and Hazendal. “When we predict that these territories will be subject to upliftment as a result of adjacent development we have also to remind buyers not to be impatient. In these areas one must think long term, perhaps a period of five or more years.” 
Prices vary across the north
Like all suburbs, sales and rental prices fluctuate between parts of the greater northern suburbs, says Just Property’s Johan van den Berg. For example, a two-bedroom apartment with near-identical specifications would let for R7 500 in Brackenfell, R8 500 in Burgundy Estate, and up to R9 500 in Durbanville.
“On the other hand, we see a drastic price increase when moving further south, as this same spec apartment could easily fetch upwards of R12 000 if you want to call Century City or Sea Point your home.”
In the northern suburbs, it is still possible to find “large numbers of attractive, well-sited rental apartments” priced in the popular R7 000 to R9 000 price range, says Janine Swart, head of Alexander Swart Property’s rental division.
“There is ongoing demand in this price bracket.” The majority of the 350 apartments handled by the property group in Brackenfell, Kraaifontein, Burgundy Estate and Durbanville is in the R4 000 to R10 000 rental bracket, Swart says. She says these apartments seldom remain without tenants for more than two months. 

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