Cape Town’s northern suburb of Brackenfell has seen radical growth, transformation and an impressive rise in residential property values. What is more, the recent slowdown in new home registrations has served only to increase values.
This is according to Rowan Alexander, Director of the Cape Town Northern Suburbs estate agency Alexander Swart Property, who says at the peak of Brackenfell’s new development phase, in 2015, a total of 2 475 home sales were registered in one year - an average of 6.8 per day. “By 2018 the figure had dropped to nearly half - for example 3.6 registrations per day, and this drop off was largely due to a massive decrease in new home registrations.”
What does this slowdown in new development mean for the property market in Brackenfell, and how will it influence home prices there?
Alexander says currently there are 26 773 registered residential properties in Brackenfell and 79 680 ‘adult’ residents. However, 44% of recent buyers have been in the young adult group under the age of 35, and this figure is increasing exponentially.
“When these self-starters move into an area it’s usually a sign that it is on the up. They are the ones who initiate improvements and upgrades,” he says.
Alexander says these buyers are attracted not only by the Brackenfell lifestyle, but also by the fact that, by Cape standards, Brackenfell prices are eminently more affordable. Last year the most popular house price category was the R1.5 million to R3 million bracket, and in this price range the average price of a home sold rose to R1.985 million. If one takes the whole of Brackenfell into account, the average price was R1.342 million.
All the significant indicators of a property boom appeared to tail off dramatically in the 12 months of 2018 - registrations of new properties dropped to 85 for the year and only 6.5% of the new property transactions were new developments, the lowest figure recorded in Brackenfell since 2010.
However, this slowdown was caused not by a lack of demand, which remains very strong to this day, but by the town running out of land to develop, says Alexander.
“The net result of this was that existing properties became even more valuable. On average, home prices have continued to rise by more than 10% per annum and big rises in higher bracket homes with a current median price of R1.65 million were recorded for the first time. The property market in Brackenfell is very healthy,” says Alexander.
Further evidence of this comes from the repossessed/sold in execution (SIE) figures. Five years ago the SIE figure was 73 for the year, but in by 2018 it had dropped to 13 - a very welcome decline has been recorded every year since 2015.
Another indicator of Brackenfell’s success as a residential property precinct comes with the news that three of its suburbs, Protea Heights, Brackenfell South and Arauna, featured in Lightstone’s list of the top 20 Western Cape suburbs in 2018. This ranking is based on capital growth, the percentage of tenants in good standing and rental returns on investment.
“This of course, means that Brackenfell is an ideal precinct for buy-to-let investors, especially those big players who these days like to take over whole blocks of residential property for renting out,” says Alexander.
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