Cape Town - There has been a big drop in average monthly rentals in the Cape Town CBD over the past year, and a significant increase in the number of rental units available there.
This is according to Carola Koblitz, communications manager of the Cape Town City Central Improvement District (CCID) and the author of the organisation’s annual publication, The State of Cape Town Central City Report.
Koblitz was speaking at the organisation’s annual business breakfast event, held at the Cape Town International Convention Centre (CTICC) on Tuesday.
“We currently have 280 units to rent in the CBD, versus 150 in December 2017. We’ve also seen a significant decline in the average monthly rentals being asked. In December 2017, the average (rental) for a studio was R12 186, and it is now R11 286,” said Koblitz.
Rental for a one-bedroom unit averaged R14 747 a month in December 2017, and now averaged R13 792, rental for a two-bedroom unit averaged R24 967 in December 2017 and now averaged R20 800, and rental for a three-bedroom unit was down from R59 000 to R37 278.
Koblitz said this was heartening for those looking to rent in the Cape Town CBD, while cautioning buyers who were looking to invest in units there for the rental market. “There is obviously quite a bit of choice available and we are assuming there is also a great deal of room for negotiation on behalf of prospective rental tenants.”
Sandra Gordon, a senior research and market analyst for Pam Golding Properties, who took an expanded look at the City’s central residential market over the past few decades, said the housing market had significantly outperformed those of other major metros in South Africa.
“One factor which has undoubtedly contributed to the robust performance of Cape Town’s residential market is the influx of older, more affluent homebuyers from across the country in recent years, the so-called semigration trend. Much of the activity in the Cape housing market has been concentrated in the well-established sub-regions of the Atlantic Seaboard, the City Bowl and the Southern Suburbs. After several years of robust growth, these areas are, however, now leading the slowdown in both activity and pricing currently evident in Cape metro housing,” said Gordon.
CCID chairperson Rob Kane said a successful downtown was the most visible indicator of a successful city. A downtown could be an asset or a liability in a city’s efforts to attract new businesses and local and foreign visitors. “It’s also key to retaining existing investment, said Kane.
Referring to the Cape Town Central City, he said the 13 development and redevelopment projects that had come online last year included six public sector investments across local, provincial and national government. Public sector investments included the new CTICC expansion, the redevelopment of the Strand Concourse, the upgrade of both the College of Cape Town and the Master of the High Court, ongoing upgrades to Cape Town Station and upgrades to the Iziko museum and planetarium in the Company’s Garden, which together totalled R1198 billion.
Private sector investments included upgrades to 4 Loop Street, Pier Place, Speakers-Corner and the Church Square precinct on the commercial side, while upgrades on the accommodation side included work on Tsogo Sun’s Cape Sun, the opening of the new Tsogo Sun SunSquare and StayEasy hotels, the opening of the Radisson Blu Hotel & Residence and the completion of The Sentinel residential complex, which had a combined value of R2.350bn.