Despite a progressively subdued market and increasingly bullish buyer sentiment, Wellington’s residential sector has retained a modicum of its former buoyancy, with stock shortages still being seen at the lower end of the market.
This is according to Chris Cilliers, CEO and Principal for Lew Geffen Sotheby’s International Realty in the Winelands, who says that the market remained encouragingly active until the end of Q3 last year when it began to notably slow with the top end of the market taking the biggest knock.
There is still a healthy appetite for homes in the R900 000 to R1.5 million price band, but investors have done their homework, and value for money now tops many of their priority lists, he says.
“We are also finding that buyers are more exacting in their standards and expectations, preferring renovated properties to the smaller, more compact homes in new developments.”
Cilliers says the majority of buyers in this price band are young families getting started and empty nesters who are downsizing, with the most popular properties being two and three bedroom homes priced below R1.5 million or at a monthly rental of between R5 000 and R8 000.
“Because of the buyer demographic, the sectional title sector fared marginally better than freehold. Not only are apartments generally more accessibly priced than houses, their low maintenance also appeals to empty nesters who no longer want the responsibility.”
According to Cilliers, the ongoing demand for affordable homes has tempered the negative impact of the current political and economic climate.
He says an analysis of Lightstone data reveals that the number of registrations actually increased last year, from 295 in 2016 to 313 in 2017 and, unlike many other areas, the median price has not plunged.
“House prices have remained consistent at a median price of R1.1 million last year and during the first two quarters of 2018, while the sectional title sector has continued to show solid growth.
“Last year the sectional median price increased by 28.8% from R520 000 in 2016 to R670 000 and again by 17.76% to R789 000 by June this year. The traditionally robust rental market in this vibrant student town, however, has taken a perceptible dip, with owners of student rental properties failing to achieve the high increase they expected.”
There is still an active investment market in this sector, says Cilliers, but buyers are aware of diminished returns and insist on value for money.
He says Wellington has become increasingly popular with people working in Cape Town’s Northern Suburbs as the burgeoning business node in that area means the daily commute is a lot easier than travelling all the way into Cape Town in peak-hour traffic. They are also drawn by the town’s historical background, spectacular mountain views and relaxed country lifestyle.
Cilliers says a major drawcard for families is that Wellington is home to several excellent primary and secondary schools, and is only a short distance from Stellenbosch University.
“The area also offers loads of family-friendly activities for those who enjoy outdoor living, including scenic hiking and mountain biking trails, beautiful wine estates, numerous sporting facilities and picturesque fishing, picnic and braai spots.”
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