It's still cheaper to be trendy in SA's cities

It's still cheaper to be trendy in SA's cities

R 20 million for a three bedroomed apartment in Cape Town's V&A waterfront may seem like a ridiculous sum to pay by South African standards, but it compares favourably with Sydney and remains significantly cheaper than upmarket apartments in other international playgrounds.

Saul Geffen, Chief Executive of MortgageSA, South Africa's leading mortgage originator, said that even the most expensive South African apartments still trailed their international peers. He said London and New York top the list of most expensive city real estate, followed by Boston, San Francisco and Paris.

"A 130 m2 two bedroom, two bathroom apartment in London or New York will set you back about R 10 - 12 million, which equates to about R 82 000 per m2, while a top Waterfront 3 bedroom apartment currently on the market for R 20 million equates to a price of R 30 000 m2 ," Geffen said.

Moving away from the Waterfront, sea-facing apartments in De Waterkant, Mouille Point, Sea Point, Bakoven, Clifton and Camps Bay come on to the market at between R 20 - 25 000 m2. City Bowl penthouses are currently priced in the region of R 16 000 per square metre

Gauteng's most expensive apartments at Sandton's Michaelangelo Towers are also priced competitively alongside other financial capitals of the world. There a two bedroom apartment is currently on the market with an asking price in the region of R 32 000 m2, with apartments in less opulent complexes in Sandton asking R 16 - 18 000 m2.

And Geffen said Durban is a relative steal with even the most expensive apartments in Berea asking R 12 - 14 000 m2.

City Apartment prices in ZAR / m2 

London (Chelsea) - R 88 000 

New York (upper East side) - R 82 000

San Francisco - R 55 000 

Madrid, Spain - R 33 000 

Gauteng (Sandton) - R 16 - 32 000 

Cape Town - R 16 - 30 000 

Sydney Australia - R 29 000 

Brisbane Australia - R 20 000 

Durban - R 12 - 14 000 

Beijing, China - R 10 000 

(Sources: www.propertygenie.co.za , November 2005 Coldwell Banker Hunt Kennedy "Global Metropolitan Condominium Home Price Comparison Study", CB Richard Ellis)

Geffen said apartment style living was still a relatively new phenomenon for South Africa's urbanites.

"Historically, South African's have wanted the house and garden, but as financial hubs like Sandton emerge, and cities like Durban and Cape Town remain business and hospitality centers we predict more and more people will want to be close to the action."

Geffen also believes that foreign buyers and corporate interest will continue to drive demand for upscale apartments. In addition, he notes ABSA economist Jacques du Toit said that SA houseprices across the board will be 80 percent higher in 5 years time as the local market continues to catch up to international valuations.

"We don't see the market softening for top-end apartments - in fact this end of the market could well enjoy sustained real price growth due to its underlying value in the eyes of purchasers," he said.

Hello ooba news

Financial freedom doesn't mean you have to win the lottery or a get an unexpected call from the executors of a long lost uncle's estate in Provence.

MortgageSA, South Africa's leading mortgage originator placing one in five mortgages, said that the possibility of a fixed mortgage system, currently being discussed by the Reserve Bank, could be a double-edged sword for consumers.

With stock markets in seesaw mode, the stability of property as an investment asset class has once again come to the fore. "House prices are expected to increase by 12% this year and while this may not be as high as in recent years, it still represents a good return" says Saul Geffen, Chief Executive of leading mortgage originator, MortgageSA.

As interest rates rise, homeowners have an even bigger incentive to invest in their bonds, as they will be saving even more interest while benefiting from the secondary advantage of a shorter term of repayment.

R 20 million for a three bedroom apartment in Cape Town's V&A waterfront may seem like a ridiculous sum to pay by South African standards, but it compares favorably with Sydney and remains significantly cheaper than upmarket apartments in other international playgrounds.