Numerous factors have helped to make the Cape Town suburb, Goodwood, a high demand precinct for middle and lower middle class buyers, says Lee Ross, the Rawson Property Group’s franchisee for Goodwood, but the two most relevant are the central position of the suburb and its consistent ability to offer good value for money.
“In Cape Town there can be no other residential district so close to the city’s major work and entertainment nodes,” said Ross. “If you live here, you are close to the centre of the city, Century City (now a major employment provider), Bellville, Pinelands, Montagu Gardens, Epping Industria and the Paarden Eiland and Brackenfell industrial complexes. You simply cannot find a better located area if you wish to keep your travel costs down – and it also has good rail and bus links. The Monte Vista station is used by hundreds of commuters who prefer to park here and take the train for the last 12 km into town.”
The second factor boosting Goodwood is, as mentioned, its relatively low prices. Sectional title apartments here sell from R450,000 to R620,000 and freehold homes in a range from R880,000 to R1,5 million. The area has upper middle bracket homes, but it is noteworthy that if a home does have a second bathroom, i.e. a main bedroom with its own bathroom and another bathroom for the children and visitors, it is immediately able to command a far higher price.
Potential buyers in Goodwood come from the entire Greater Cape Town area and they have, said Ross, raised the demand for homes in Goodwood to the point where sellers can now often ‘get away with’ price rises of 9% to 12% per annum and provided they price at market related levels, they will seldom have to wait more than two or three weeks to find a buyer. Despite dire stock shortages, his team, said Ross, is selling six to eight homes per month.
Can this bullish situation continue?
If interest rates do rise by 0,5% or 1% within the next year, says Ross, this will, he believes, cause the buying market to contract by anything up to 20% - and the hit rate in bond applications, which is currently on 60%, will fall lower.
“The banks, who are already having difficulty finding value in homes where prices have risen by 35% in three years, are likely to ‘dig in’ and become even more reluctant. These two factors together could result in price escalation slowing down.”
As in so many areas with similar stock ranges, buy-to-let investors, said Ross, are moving into Goodwood steadily. Rents, he said, today vary very much depending on which part of Goodwood the home is sited (those below the Milton Road divide are less expensive than those above it), but in general sectional title units will rent from R4,500 per month for a single bedroom unit to R6,500 for a two bedroom unit, while freestanding homes are priced from R6,500 to R10,000 per month, with one or two unusual, bigger homes being able to charge anything up to R14,000 or R15,000 per month.
Asked how he and his team will maintain stock levels in the current dire shortage scenario, Ross said that they have been working to a plan to counter this and this has been fairly effective.
“Although stock will never be plentiful here, thus far we have never had to face a situation in which it has completely dried up.”
The Rawson franchise’s big advantage in this area, he added, is that it was one of the first three to be founded by Bill Rawson and the Rawson brand is therefore very well known in Goodwood - a factor which he said helps a great deal.
