Demand for apartments continues to rise exponentially

While more than half of all property sales nationally are still for freehold property, demand for apartments continues to rise exponentially, with buyers prepared to pay ever higher prices, according to the Seeff Property Group.

Lifestyle has become a top priority, with people looking for more leisure time and lower maintenance. Urbanisation, traffic congestion, and the need to live closer to places of work will likely remain key drivers of the demand for apartments, according to agents from Seeff.

Consequently, apartment sales have boomed in many areas over the last year. In Cape Town around 24% of property stock are sectional title units, many of which are apartments. Propstats data shows a booming apartment sales market with over R6.1b in apartment sales in Cape Town over the last year.

On the Atlantic Seaboard, apartment sales topped R3.3b last year. Only 20% were priced below R2m, and over one-third of sales were above R5m. Ross Levin, licensee for Seeff Atlantic Seaboard and City Bowl, says apartments achieved some of the highest prices paid in Cape Town last year.

These include prices of R50m and R53m paid in Eventide in Clifton and R54m in Helenslee at the Waterfront. The prices per square metre reached R187,970/sqm in San Michele in Clifton, R163,636/sqm in Helenslee at the Waterfront, and R160,714/sqm in La Corniche, also in Clifton.

Levin says the City Bowl/CBD also enjoyed a buoyant year with apartment sales of over R1.2b. 46% of all apartments sold were priced below R2m, while 30 apartments sold above R5m. According to Levin, several sales topped R10m as price ceilings continue rising due to high demand for apartment living.

He says further that where other CBDs such as Johannesburg and Durban have seen significant decline since the COVID lockdowns, Cape Town’s CBD remains a success story despite facing many pandemic-related challenges. The CBD in fact enjoyed an uptick in apartment sales over the last year with some 159 units sold at an average price of R2,432,793.

The highest prices achieved in the City Bowl include R17.95m in 16 On Bree, R17.8m in 8 Higgo Road, R17.31m in 15 On Orange and R16m in Metropolis in De Waterkant. Prices paid per square metre reached R122,857/sqm at 16 On Bree, R76,316/sqm at The Docklands, and R67,403/sqm at Faulconier at the Foreshore.

Tourism and business access drive strong demand for apartment rentals across the Atlantic Seaboard and City Bowl/CBD, making these attractive rental investments. Craig Watchurst, an agent with Seeff City Bowl, says many companies are looking to convert office space into apartments in the CBD area. Micro apartments are popular with developers, and also offer more accessible pricing for young property market entrants, and are ideal Airbnb and rental investments, he adds.

Century City, about 15-minutes’ drive from the CBD, is another bustling area, especially for apartment rentals, according to Helga Clemo, Seeff’s licensee for the area. Prices depend on what the complex offers, and proximity to Canal Walk. Apartments sell for, on average, between R2m to R4m. The highest rental achieved is R70,000 per month for a furnished apartment in Crystal Towers.

Other high demand beach areas such as Blouberg and Strand have also seen buoyant apartment sales and rentals over the last year. In the Blouberg/Table View/Parklands areas for example some 350 apartments sold at an average price of just under R1.8m. Beach and sea-view apartments reached prices of up to R6.2m in Portico, R6.95m in Grasso Heights, and R7.25m in Dolphin Beach.

Apartments in Beach Road in Strand have reached rentals of up to  R20,000 per month in Topaz and R35,000 per month in 97 On Strand according to Alten Vermaak, licensee for Seeff Strand and Gordon’s Bay.

The Gauteng metros are also hugely popular for apartment living. Johannesburg’s Northern Suburbs, Sandton and Midrand are home to a number of apartment complexes which are always in demand. Many new complexes have also come into the market over the last few years according to Charles Vining, MD for Seeff Sandton.

Although the vast majority of apartments sell for below R4m, prices for high-end luxury apartments around the Sandton CBD now tend to range upwards of R20m to over R80m for a penthouse with spectacular views over the city.

A more affordable alternative is Randburg, according to John O’Reilly, a rentals agent with Seeff Randburg. The most in-demand apartments tend to be one and two-bedroomed units in the R800,000 to R1.5m price range. They are also very popular for rentals.

Writer: Gina Meintjes