The allure of waterfront properties, and chilly winter no dampener for Cape's busy rental market

When it comes to real estate dreams, waterfront properties possess a timeless allure that captivates homebuyers who are not only drawn by their stunning views but also the unique lifestyle they offer. 

So says Arnold Maritz, Co-Principal of Lew Geffen Sotheby’s International Realty in Cape Town’s Southern Suburbs and False Bay, adding that the prime location of these homes can also significantly affect their value, making them a sought-after and prestigious investment.

Family home with breathtaking views in Marina Da Gama for R5.2 million 

Introducing this freestanding family home that offers breathtaking views and resides in well sought-after Marina da Gama. The house stands proudly boasting 4 bedroom en-suite, 2 of which open out to the terrace which seamlessly merges the indoor and outdoor spaces. On the upper floor level, there is a large studio with fully equipped kitchen. Click here to view. 

“Cape Town is blessed with abundant natural beauty and a long stretch of coastline and, for many locals the goal is to eventually move closer to the water, but for upcountry and foreign buyers, this is often the holy grail which has driven prices up in many areas such as the Atlantic Seaboard.

“However, some areas like the False Bay coastal strip, flew under the radar for many years but this is now starting to change as more and more buyers are realising the unique appeal and comparable value the region still offers.

“It also boasts a very wide property selection to suit most budgets and each suburb has a unique charm. For instance, in Muizenberg which is known as surfer’s paradise, it’s still possible to buy a six-bedroom family home with a pool situated only a short stroll from the beach for R6.5 million.

“And at the other end of the scale, horse lovers can buy an equestrian estate in Noordhoek for R22m or a modern designer home in a secure estate with ocean views for between R5m and R30m. And in between lies a whole other range of options and characterful suburbs, from Imhoff’s Gift, Kommetjie, Scarborough, Simon’s Town and quirky Fish Hoek to aspirational St James.”

Smell the ocean from this fabulous home in Kommetjie for R8.25 million

With two homes set on one stand the property is extremely versatile, offering the perfect dual living situation or family home with an income generating flatlet, or use the second dwelling as your office or studio. Click here to view.

Marina da Gama near Muizenberg and Lake Michelle in Noordhoek also offer sought after waterfront properties in the South Peninsula.

Equestrian farmstead in Noordhoek for R22 million

Situated off the beaten track in old Noordhoek, this 3½ acre equestrian farmstead is within easy access of the NRC competition grounds. This warm and welcoming thatched residence has both a rustic and charming feel. The kitchen, fireplace and the extra large island, create the heart of the living area, which also boasts a high, open thatch and wooden stable-style doors. Click here to view. 

Maritz says that there are a number of factors which contribute to the desirability and value of properties on or near the water:

• Natural Beauty and Tranquillity:

Waterfront properties usually offer stunning views and a sense of serenity that is hard to replicate. The shimmering expanse of a lake, the rhythmic waves of an ocean, or the gentle flow of a river provide a constant connection with nature, creating calming environment.

• Recreational Opportunities:

Proximity to water opens up a wide range of recreational activities, including swimming, boating, fishing, kayaking, paddleboarding, and other water-based sports. These activities not only provide entertainment but also contribute to a healthy and active lifestyle.

• Status and Exclusivity:

Waterfront properties have long been associated with prestige and exclusivity. Owning a waterfront home is often considered a symbol of success and accomplishment and the limited supply of these homes adds to their allure, making them highly sought after by those who value luxury and uniqueness. Waterfront living also offers a sense of privacy and seclusion, creating a sanctuary away from the hustle and bustle of city life.

• Potential Investment Value:

The limited supply of waterfront land, coupled with high demand, can lead to significant appreciation in property values over time. Waterfront locations tend to be highly desirable and attract affluent buyers, which can positively impact the resale value of these properties. Additionally, waterfront homes often serve as vacation rentals, generating income for owners when not in use.

However, Maritz advises that from an investment perspective, several factors come into play when determining the value of a waterfront property and buyers should take the following into consideration when looking to buy in these areas:

• Location: The location of the waterfront property significantly influences its value. Proximity to popular amenities, attractions, and vibrant city centres can increase desirability and value. Additionally, factors such as water quality and the overall appeal of the surrounding area play a role in determining value.
• View and Frontage: The quality of the view and the amount of water frontage impacts a property's value. Unobstructed views of the water, whether it's an expansive ocean vista or a tranquil lakeside panorama, command a premium.
• Water Access: The ease of access to the water is a crucial factor. Properties with safe and convenient access for activities like boating or swimming tend to be more desirable and therefore have higher value. Direct access to the water, such as private beaches or docks, also add value.
• Property Condition and Amenities: The condition of the property and the presence of amenities also affect its value. Well-maintained homes, modern features, and luxurious amenities like pools, spas, or boat slips can enhance the value of waterfront properties.
• Market Demand: The overall demand for waterfront properties in a particular area plays a significant role in their value. Popular areas with high demand, limited supply, and a strong market for waterfront homes are likely to have higher property values.
• Climate and Seasonal Variations: Waterfront properties in regions with milder climates and extended warm seasons tend to have higher demand and value.

“Ultimately, waterfront real estate offers the very appealing combination of an exceptional lifestyle and a sound investment long-term opportunity,” concludes Maritz.

Their desirability and exclusivity make them a wise investment choice in all market conditions, as they tend to hold their value and even outperform properties located further inland.”

Chilly, wet winter no dampener for Cape Town’s busy residential rental market:

Following a bumper summer residential rental season from November to March - with very high tenant demand, and despite a particularly cold and wet winter, at a time when market activity slows, Cape Town’s rental market continues to experience steady demand from tenants, says Arno de Wit, Pam Golding Properties rentals manager for the Cape Metro.

Says de Wit: “The Cape Town rental market is seasonal, historically with the summer months always busier and experiencing higher demand, with the student market and families relocating after the completion of a school year contributing to the seasonal demand trend.

“However, being a thriving metropolis with arguably the best lifestyle and service delivery, Cape Town has always been desirable to local and foreign tenants.

Camps Bay rental:

This four-bedroom house in Camps Bay is to rent from R15 000 per day or R120 000 per month on a long-term let through Pam Golding Properties - Click here to view. 

“Generally, we find that three to five-bedroom houses located in close proximity to good schools remain highly sought after, particularly in the price range between R35 000 and R70 000 per month, as well as one to two-bedroom apartments in complexes offering good security and near local amenities which also in great demand, mainly between R15 000 to R25 000 per month.

“However,” says de Wit, “there is a wide variety and price range of homes to rent in the Cape Town metro. For example, the scope of properties to rent extends from R14 000 to R18 000 for one bedroom, from R18 000 to R28 000 for two bedrooms, and R35 000 to R50 000 for three-bedroom apartments and penthouses. Freestanding homes start from around R28 000 for three bedrooms, from R35 000 to R70 000 for four bedrooms, and can range up to R120 000 plus for spacious five or six-bedroom houses with size, condition, views, location and security all factored into the pricing.

Constantia rental: 

Caption Constantia: This seven-bedroom house in Constantia Upper is to rent from R20 000 per day through Pam Golding Properties - Click here to view. 

“Apart from enquiries from locals, including semigrators from other regions looking to rent before they make a decision regarding which suburb may be best suited to their needs before buying, we also receive requests for homes to rent from potential tenants from America, the UK, Germany, France, Italy, and other European countries. Their main criteria are homes that offer good security and close proximity to schools and/or local amenities. Coupled with this, the demand for homes offering alternative energy sources during load shedding keeps growing.”

De Wit adds that recently, the semigration trend has become one of the key drivers behind the surge of people looking to relocate to Cape Town, with the resultant high demand causing rental rates to increase by around 15-20% over the past 9-12 months. “I anticipate that this tenant demand will continue on the same trend for the next 12 months, further fuelled by the increased interest rate, which has created a spike in rental demand for properties in sought-after areas.

How much prime residential space can you rent for $2 000 a week?

“While internationally acknowledged as a prime residential destination worldwide, Cape Town still offers value for money, as seen in Savills list of 25 top global cities. According to a recent global report by Savills, prime rents in the world’s leading cities continue to grow. Renters with a budget of $2 000 a week ($8 000 a month) can rent a property with an average size of 3 825 square feet in 25 top global cities that Savills monitors. That’s 277 square feet less than before the pandemic, since when rents have risen by 11 percent.”

Source: Savills Research

Savills report says that New York remains the most expensive city for prime renters, with $2 000 a week buying just 900 square feet – 110 square feet less than in 2019, with Hong Kong, Los Angeles, Tokyo and London the next priciest locations. Rents across these five megacities have increased by eight percent on average since 2019, and $2 000 a week now secures less than 2 000 square feet of prime residential space. The highest risers were Miami, Dubai and Singapore.

For $2 000 a week, a prime renter in Miami can rent only half the space they could in 2019 - down from 4 430 square feet to 2 200 square feet. This city has benefitted from a growing demand for a warmer climate, tax incentives, and a lower cost of living. Miami’s residential market is forecast to see positive rental growth continue, with growth of 4-5.9 percent forecast for 2023. This is fuelled by strong demand, rising house prices that are pushing buyers to the leasing market, and the city’s depleted rental stock volumes.

The search for warm weather, more space, and a higher quality of life has also boosted rents in Dubai. A prime renter could lease an average of 5 090 square feet here in 2019 for $2 000 a week. They could now only afford just over half of that space, and Dubai now sits between two major European cities Amsterdam and Berlin in the rental league table. 

In Europe, Madrid and Barcelona offer the best value for prime renters. For $2 000 a week they can lease 4 910 square feet and 4 610 square feet of prime residential space, well over twice as much as in London (1 830 square feet) and Paris (2 120 square feet). A digital nomad visa introduced at the start of this year should encourage greater movement of non-EU executives and entrepreneurs to the Spanish cities, driving rental demand in these competitively priced markets.

Hong Kong was the only city in the top five where rental values have fallen since 2019, declining by 14 percent. It’s the second most expensive rental market of the 25 cities, with $2 000 a week securing approximately 1 250 square feet of prime residential space. This is 150 square feet more than in 2019. International and domestic demand has fallen here due to pandemic-related restrictions and ongoing political uncertainties. 

Moving through 2023, the picture varies city to city. Most of these 25 cities have outperformed 2019 rental values and look set to continue growing this year. European cities Madrid,   Rome, and Athens face a lack of prime rental stock which is expected to continue driving rental growth. Asian cities such as Toyo and Bangkok are likely to see international tenant demand return and elevate rents.

Top performers in 2022, Singapore and Miami are not forecast to see their rental markets slowing anytime soon, due to migration trends bringing ever more people to these locations. Dubai, another top performer in 2022, is expecting to see an influx of prime stock come to market which could help ease increasing rents.

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