Johan Hugo, the Rawson Property Group’s franchisee for Stellenbosch and Franschhoek, has recently surprised certain property trend watchers by saying that many opportunities now await enterprising residential property developers in Franschhoek – and he has made the point by identifying these so as to be able to give advice on this matter. He hopes, too, to be involved with the marketing and selling of any units that come about as a result of this initiative.
“The municipality is, however, more than prepared to approve densification in the built areas and what they want to see here, if possible, is a growth in duplex and apartment projects, provided these conform to the strict architectural guidelines that apply here. In Franschhoek, in particular, it has to be admitted that these have played a very significant role in preserving the town’s character and general appeal.”
The second point to be grasped, said Hugo, is that since the low point in 2010 Franschhoek has been flourishing as never before. The average price of freehold units in 2010 is recorded by Lightstone as being R1,735,000, but today, halfway through 2015, the average price has already reached R3,645,000, giving an annual increase in the region of 16%. The performance on sectional title units has been very similar.
As in all thriving economies, said Hugo, the good conditions have resulted in a steady influx of employees to the town – they come to serve the shops, the banks, restaurants, pubs, delicatessens, the home maintenance and other service industries and, of course, the municipality itself, which is a large employer. The vast majority of people working in Franschhoek have to commute because they cannot be accommodated in the town, simply due to the fact that there is not enough housing in what by Franschhoek standards is the affordable price of R2 million to R3.5 million. What is available at present tends to be expensive.
“What Franschhoek now needs,” said Hugo, “is new duplex units selling from R2 million to R3,5 million and apartments selling at R900,000 to R1,6 million. To achieve this may well mean replacing certain older houses, which quite possibly have little architectural merit, with high density units. It can be accepted at the outset, that sites will not be handed to the developers on a silver platter and that conforming to the municipality’s architectural wishes may be difficult. However, what I can guarantee is that if units of the kind described are produced they will prove to be as good an investment as it is possible to make because rents in Franschhoek are high and, as already indicated, the capital appreciation on the investment of residential property here is impressive.
“The general perception that Franchhoek is a no-go area for developers is not accurate,” said Hugo. “The truth is that huge opportunities do await developers here and I, having researched the subject, would be more than willing to introduce competent developers to where good opportunities await them.”
For further information contact Johan Hugo on 021 882 8960.
