While the majority of property in the greater Durbanville area comprises of freehold homes, Joe van Rooyen, Seeff’s licensee for the area, advises that the demand for sectional title property has seen by far the biggest rise.
Although the market for freehold houses has slowed somewhat over the last year, we have seen the complete opposite in terms of sectional title property with demand now soaring, he adds.
“While sectional title property only make up about 5.8 percent of all property in the area, it accounted for just over a third (31.8 percent) of all sales over the last year. Aside from owner-buyers, we have seen a significant rise in demand coming from investors looking to capitalise on the rental demand in the area,” he says.
And, these properties are selling quite quickly. Where freehold houses for example sell for on average within two to three months of listing, sectional title property sells within half that time, often within a week to a month of listing it.
The attraction for investment buyers in particular is two-fold, said Mr Van Rooyen. There is strong demand for rental accommodation in the area, especially in the sectional title sector and landlords are currently enjoying rather attractive gross rental yields of 7 percent to 9 percent.
The risks are also quite low as there are very good tenants in the area. Seeff for example boasts a 100 percent success rate in terms of rental collections over the last year with almost no incidents of delinquency, according to Mr Van Rooyen.
From a pricing perspective too, Durbanville is an excellent area to invest in. Sectional title property is still very affordable. The average sales price is for example still at around R745 000 with the majority of apartment sales over the last year, falling under the R1 million price band.
The location makes the wider Durbanville area a top choice not just among freehold house buyers, but as we have seen over the last year or so, sectional title buyers including investor buyers especially.
The area is quite tranquil with plenty of trees and you have the Tygerberg Hills, the nature reserve and of course the popular wine valley with top end estates such as Durbanville Hills and D’Aria practically on the doorstep here.
Add to that a bustling commercial centre, especially around the Tygervalley Waterfront and the Tyger Valley Shopping Mall. Excellent infrastructure and quick access to the N1 makes it a popular choice for a wide range of buyers, not just of family homes, but especially apartments, townhouses and clusters, he said. Rental demand has also risen significantly.
The affordability is a big drawcard. You can for example still find a one-bedroomed flat with an undercover parking in a safe complex for just R490 000. It can be rented out for about R5 000 a month, slightly more than the current bond repayment of around R4 892 (based on no deposit, 10.5 percent and a 20-year repayment period).
A two-bedroomed unit, also in a secure complex within close proximity to the new Curro Private School, shopping centres, Cape Gate Medi-Clinic and main access routes, for example sells for a very affordable R775 000. The unit is in a popular rental complex and can be rented out at about R7 900, also slightly more than the current bond repayment of R7 737 (based on no deposit, 10.5 percent and a 20-year repayment period).
Mr Van Rooyen says the highest rental demand is in fact for sectional title property and the more secure, the better.
As a general guideline, rental rates start at around R5 000 a month for an older one-bedroomed apartment and range to about R8 000 for a two-bedroomed unit with modern finishes.
Townhouses start at around R8 000 and range to about R18 000 for a three-bedroomed cluster with luxury finishes.