Almost R14 billion worth of property investments were made in the Cape Town city centre in 2019 despite challenges facing the city, including a tight economy.
In fact, investor confidence in the central city was on the rebound last year, notes the latest State of Cape Town Central City Report.
Completed projects amounted to approximately R1.045 billion while the estimated value of those under construction was at least R3.73 billion. The value of planned projects is estimated at a minimum of R5.196 billion and proposed projects at R3.86 billion.
The report states that the Foreshore precinct has been earmarked as a commercial and mixed-use development node following the opening in 2016 of the new Netcare Christiaan Barnard Memorial Hospital and the subsequent expansion in 2018 of the Cape Town International Convention Centre which triggered billion-rand developments.
This includes The Onyx, a R700 million residential hotel with apartments completed in 2018 and which reflects the need for more flexible accommodation options by business visitors and tourists.
Furthermore, commercial developments in 2019 included the completion of two five-star boutique hotels, the 32-room Gorgeous George and seven-suite Labotessa, as well as the three-star Signature Lux Foreshore and the Capetonian hotel – worth R585 million in total.
“Developments have also been influenced by the global urbanism trend which has seen people buying into inner-city developments that meet their daily needs all within walking distance. The development of the Absa building into Foreshore Place is a case in point. The R373 million mixed-use complex will have 11 floors of residential units above 15 floors of commercial space, with retail outlets on the ground floor.”
The central city’s residential market, however, finally felt the effects of the economic and political headwinds which have dampened activity in the national and regional housing markets in recent years. The median price of apartments sold in the Central City peaked at R2.1 million in 2018, easing to R1.8 million in 2019.
“This was accompanied by a sharp downturn in unit sales – which halved from 2018 levels. The 2018 figures were elevated by two new developments which brought 156 new apartments onto the market…”
Citing PropStats data the report says apartments sold for an average of 9.5 % less than the asking price in 2018 – the highest discount to asking price seen in recent years.
At the end of 2019, a total of 180 units were listed as available for rent in the Central City compared to 223 units at the end of 2018. This excludes short-term rentals in terms of entities such as Airbnb.
The report recorded average monthly rentals for 2019 as being:
R11 289 for a studio/bachelor flat
R12 723 for a one-bedroom
R19 666 for two bedrooms
R35 600 for three bedrooms
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