Agents sensitive to property market trends are seeing the first tentative signs of a possible regeneration in the Kraaifontein residential market in northern Cape Town.
This is according to Rowan Alexander, Director of Alexander Swart Property, who says if his early perceptions are valid, now is the time for shrewd property investors to be looking at Kraaifontein.
“As it stands, Kraaifontein, in my view, is ten years behind its neighbour, Brackenfell, and five years behind its other neighbour, Durbanville," he says. "Brackenfell is now a mature market, one that has been through a surprising and very successful transition period."
He says Durbanville is in the middle of a regeneration which is set to add considerable value to most properties, but Kraaifontein could only now just be seeing the start of a new, more exciting and profitable era.
On what evidence does Alexander base this opinion?
“You have to look at the overall picture. Kraaifontein has 22 027 registered residential properties and an adult population of 81 568. Half the current owners have been there more than 11 years, and for a long time the area has seen almost no real pick-up in growth or in sale registrations. In 2018, there were only 552 sales, and prior to this the total for nearly ten years was never above 900.”
However, Alexander says in his experience, when an area’s prices flatline in this way for a longish period, the scene is set for younger people, often buying for the first time, to move in. “They are attracted by the lower prices - in Kraaifontien nearly 50% of all the homes are in the R800 000 to R1.5 million bracket, and in this price range the average price is R1.189 million. Such buyers are usually willing to take the time, find the capital and make the effort to upgrade their homes, thereby initiating a transition phase.”
Alexander says the chances are now that many younger people will find what they can afford to buy property if they look at Kraaifontein. According to Lightstone, last year eight out of ten buyers here were young adults (18 to 35 years). "This means that there is a healthy mix of young buyers, middle-aged (36 to 49) and older generation residents who, together, will usher in Kraaifontein’s regeneration.”
“I should not be surprised if, in the next five years, Kraaifontein undergoes a mini-boom similar, though not as widespread, as that which transformed Brackenfell.”
Alexander says this regeneration is likely to be spurred on by the major bond issuing banks who now look on Kraaifontein favourably. The 2018 figures show that Standard Bank led the way with R180 million worth of bond loans to Kraaifontein. Absa and Nedbank loaned R140 million worth in the area, FNB R120 million, and SA Home Loans R35 million.
“These figures indicate that it may well be easier to get bank finance in Kraaifontein than in many other Cape suburbs,” he says.
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