What it costs for a holiday home in Cape Town

What it costs for a holiday home in Cape Town

Private Property South Africa

The slow-down in the Cape coastal property market has been a boon for South African holiday buyers given that price growth has halted in the high demand hot spots, barely keeping tread with the CPI rate. That means that you can find excellent value along with motivated sellers according to Seeff’s agents.

Holiday properties are increasingly sought as people look for alternatives to traditional hotels, often now choosing Airbnb, or, preferably to invest in their own holiday apartment which can then be rented out when not in use, says Ms Natalie Muller, rentals manager for Seeff Atlantic Seaboard.

Despite the depressed economic conditions, beach apartment sales of almost R2bn have been concluded in the Cape metro since the start of 2018, over 60% of the value generated on the Atlantic Seaboard – on Victoria Road (Clifton and Bantry Bay) where R447m have sold at an average of R22,3m and highest price of R80m and on Beach Road (Sea Point and Mouille Point) where R763,8 have sold at at an average of R7,6m and highest price of R28m.

Nineteen of the highest prices paid on the Atlantic Seaboard, were for beach apartments. These include six sales in Bantry Bay (highest price of R80m), four in Mouille Point (highest price R40m), three in Clifton (highest price of R42m), two in Camps Bay (highest price of R28m) and two at the Waterfront (highest price R26,5m).

In the Blouberg area, beach apartment sales of around R240 million were concluded, predominantly in the Waves Edge, Bloubergrant and Big Bay areas at an average price of R1,8m-R2,2m and a highest price of R4,45m (Eden on the Bay) and R4,72m (Wave’s Edge). In the Strand area, beach apartment sales clocked up around R188m for 2018 alone at an average price of R1,775m.

Generally speaking, Seeff’s agents say that you can now find a good holiday property from around R2m in the Blouberg, False Bay, Strand and Gordon’s Bay areas, and in the top end Atlantic Seaboard areas such as Sea Point from around R6m and upwards of R12m-R40m in top end areas of Clifton, Bantry Bay, Mouille Point and the Waterfront.

Cape Town offers SAs longest coastline and highest number of beaches (most with Blue-Flag status) to be found in Clifton, Camps Bay, Llandudno, Muizenberg, Fish Hoek, Gordons Bay (Bikini Beach), Strand and Bloubergstrand. Most of these are fronted by apartment complexes.

Seeff unpacks what it costs for holiday investments in the buyer hotspots:

Gordons Bay – holiday apartments from R500,000

Gordons Bay is famous for the Blue-Flag Bikini Beach and yacht-lined bay and offers easy access from the airport. Louelle Lubbe, Seeff’s licensee for Gordons Bay says the area is very affordable with apartment prices from just R500,000 and houses from R1 million. Beach and sea view properties range from R4m-R6m. On the Mountainside, you can find luxury houses overlooking the bay, from around R6m-R20m.

Harbour Island is attractive for holiday buyers, offering apartments in the R1.5m-R3.5m range, houses from R2m and luxury waterfront homes with yacht/boat moorings from R4m-R14m.

View properties available in Gordon's Bay

Strand – beachfront apartments from R900,000

The upgraded Strand promenade is lined with restaurants and attractions such as a waterpark, put-put for children and Olympic-sized swimming pool. Alten Vermaak, Seeff’s licensee for Strand says easy access from the airport makes it a popular holiday destination.

Beach Road is lined with apartment complexes which, at an average price of R17,842/sqm is still very affordable compared to Blouberg and the Atlantic Seaboard, he says. Apartment prices range from R890,000 to R8m.

There is an excellent choice of apartment including new complexes which offer top security and luxury amenities. Topaz for example has a games room, gym, sauna and swimming pool. Hibernian Towers also has a pool, gym and sauna, as well as restaurant, retail and other services on the ground floor. Ocean View is another popular option. All apartments offer stunning views and modern finishes.

View properties available in the Strand

Blouberg – beachfront apartments from R1,4 million

As a holiday and kite surfing destination, Blouberg is an excellent choice for holiday investments according to Clinton Martle, Seeff’s licensee for the area. There are a significant number of complexes to choose from; all close to leisure/retail hotspots such the Marine Circle area, Seaside Village, Eden on the Bay, and Blue Peter and Ons Huisie areas in the Bloubergstrand village.

Beach apartments are selling for around R24,000-R34,000/sqm and for new luxury units R40,000-R71,000/sqm based on Propstats sales data. Prices range from R1,4m-R3m on average, and for new developments from R6m-R21,5m for a top end luxury unit in the new C’est La Vie development. Big Bay achieves R20,000-R40,000/sqm and prices of R1,4m-R2,8m on average.

View properties available in Blouberg

Muizenberg/Fish Hoek – holiday apartments from R1,5 million

The Muizenberg/Fish Hoek area benefits from the slightly warmer False Bay sea and is one of SAs top surfing hot spots according to Ms Paddy Mow, an agent with Seeff who specialises in beach apartments. It is a high demand holiday area and increasingly popular with holiday investors. Expect to pay R1,5m-R3,5m on average. Holiday rental rates range from R1,000-R3,000/day depending on the season.

View properties in Muizenberg

Mouille Point/Waterfront – waterfront apartments from R4m

While the Atlantic Seaboard offers a wealth of apartments, Mouille Point and the Waterfront are particularly well suited to holiday investors, says Ms Finella Botes, Seeff’s agent for the areas.

Mouille Point now sells for R4,5m-R40m (R70,000-R80,000/sqm) and the Waterfront from R6m-R18m on average and R25m-R65m for top end sea facing units. Canal apartments are achieving R80,000-R100,000/sqm and R110,000-R120,000/sqm on the Front Yacht Basin. Apartments in the Silo’s range sell for R8,5m-R26,5m (R80,000-R105,000/sqm).

View homes available in Mouille Point

Clifton – beach apartments from R8m

Lance Cohen, Seeff’s luxury market specialist for the Atlantic Seaboard says that although the market is quiet, apartments in Clifton remain highly sought-after for holiday investments, attracting wealthy buyers from across the world. On the mountainside, you can still buy for R50,000-R120,000/sqm, but expect to pay around R100,000-R200,000/sqm on the seaside of Victoria Road. Prices have remained flat for the last two years and it is a good time to invest here, he says. Current stock ranges from R20m-R65m.

View properties in Clifton here

Need to know when investing in holiday property

As the continent’s top tourist city, Cape Town is in high demand for holiday accommodation and has a buoyant Airbnb and holiday rentals market, says Ms Muller. You can therefore invest in your own holiday apartment and rent it out when not in use, but be warned, the market is somewhat overstocked right now.

Invest with great care and forethought though, especially if you live in another province, she says. Buy in a good spot close to amenities and entertainment, preferably with a sea view and easy beach access. Location is important to attract high calibre holidaymakers and good rental returns.

Bear in mind that holiday rental income streams are not steady but seasonal. Stock levels affect the demand and returns, and you should ensure you are able to absorb the costs if you are unable to fill your property. Holiday homes, especially on the coast, also attract higher maintenance costs.


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