John Weston, franchise principal for Rawson Properties Bergvliet/Meadowridge (both suburbs sited south of Cape Town, some 20 km from its centre) recently picked up on Clarke’s comment and said that his territory is a shining example of one that has been able to buck trends.
"The great challenge my franchise faces," said Weston, "is that we never have quite enough stock to meet demand. Unlike most big city suburbs throughout South Africa, the scenario here is very definitely in favour of the seller."
Homes priced at R2 million or lower, said Weston, are now snapped up in a few days. One such home in Heerengracht Road, which had an open day show house, was launched at R1,895 million and attracted over 30 visitors in a single Sunday afternoon. The sale, which was done for cash, was signed up by 7 p.m. that night!
"Bergvliet and Meadowridge," said Weston, "are being radically transformed. There has been a huge influx of younger buyers and many of these are dedicated renovators, prepared to spend much of their own time and considerable money on modernizing and improving homes that are often 40 to 60 years old."
The upgrading, said Weston, usually involves spending R250,000 to R400,000 on improvements, which adds excellent value to the property without over capitalizing the purchaser's investment. If this increases the value to ± R2, 5 million, he said, this is acceptable because the market – up to R3 million – is buoyant.
Typically, he said, renovations involve compartmentalized interiors becoming open-plan living, dining and kitchen space and making the home more suitable for indoor/outdoor entertainment. Homes in his area, he added, are well suited to upgrading because most of them are very well built and have been excellently maintained. In addition, being 'old style' Peninsula homes, they have larger-than-average plots, usually 850 m2 to 900 m2 in size which are ideal for younger families with children.
Asked what is driving the strong demand in the area, Weston said that one of the prime factors – it could indeed have been the most important factor of all – is the quality of the schools in Bergvliet and Meadowridge. Together these house some 2800 pupils from nursery school to Grade 12 and the results achieved by their pupils are good.
Due to the fact that so many potential buyers fail to achieve a purchase in Bergvliet/Meadowridge, what advice does Weston have for them?
"In most cases," he said, "despite putting in good offers, buyers are "pipped" at the post by others who can pay cash or who have already pre-qualified for the necessary bond and sometimes have written proof thereof. Buyers whose offers were, as was so often the case in the old days, subject to the sale of their existing property, simply do not shape in the sub-R2 million market as these are snapped up by ready, willing and able purchasers.
"If, therefore, you are serious about buying in our area, the best tactic is to sell your existing home first so that you can come in with a quick, realistic offer."
As is usually the case where suburbs have become popular, added Weston, in Bergvliet and Meadowridge, rents are now skyrocketing and are perhaps 30% up on those of three to four years ago. It is, he said, quite easy to obtain monthly rentals of R12,000 to R15,000 on three or four bedroom homes with a pool and a double garage.
Weston estimated that price appreciation throughout his territory is growing year-by-year and he predicted that this would continue for the foreseeable future.
"The lesson to be learned therefore," he said, "is that this is the right place to buy, especially now that interest rates are at a 30 year low."
Those who do buy will see significant growth in the value of their homes in the next five years.