Transport Solutions vs Property Values | Cape Town
Cape Town has invested significantly in public transport and non-motorised transport facilities over the past five years – and this rollout is paying dividends for estate agents marketing the Mother City. Pam Golding Properties tell us why it has had a positive effect on property values for their clients:
‘Property professionals say the 2010 FIFA World Cup™ was a catalyst. Many locals were introduced to public transport when they travelled by train to the Stadium and Fan Fest™ gatherings for World Cup™ fixtures in 2010.
Transport for Cape Town, the City’s transport authority, has since rolled out more services. By early September this year, the MyCiTi service had 31 routes with buses covering on average distance of over 1 270 000 km each month. There were 36 stations, more than 500 bus stops and over 215 buses in the peak-hour periods, transporting 47 909 passengers on a week day.
For example, since the first MyCiTi routes made the airport and Western Seaboard more accessible from the CBD, newer routes have linked the city centre to suburbs in the City Bowl as well as Sea Point, Clifton, Camps Bay via the coast road and over Kloof Nek, and Hout Bay.
This rollout has been supported by complementary offerings such as safe, scenic cycle routes, and the introduction of Uber. While disruptive to metered taxi drivers, the Uber app connects the public with a reliable ride – from low-cost to premium – in minutes.
Pam Golding Properties (PGP) MD (Western Cape) Laurie Wener says: ‘Good public transport improves accessibility and commuting times for local residents. Values for properties that are near good transport links often show stronger growth than comparable properties without these connections.
‘Given the increasing numbers of vehicles on the road, rising fuel prices and people’s expectations of connectivity and convenience, the more varied transport options you have at your door, the more capital gain you can expect.’
An American study has shown that ‘moving beyond the traditional arguments that good schools and neighbourhood amenities impact housing prices, emerging research has indicated that urban form and transportation options have played a key role in the ability of residential properties to maintain their value since the onset of the recession.’ (The New Real Estate Mantra: Location Near Public Transportation, March 2013, commissioned by the American Public Transportation Association in partnership with the National Association of Realtors.)
PGP area specialist for the City Bowl, Peter Spencer, says MyCiTi is a winner for buyers or renters considering this area. ‘Parents of students are very impressed. Using MyCiTi means they can get to their classes and out at night without the added expense of buying a car, and they can hop on and get to the airport when they fly back home.’
Uber, he says, is ‘fantastic’ for all ages and its introduction to Cape Town is one of many transport options making the city ‘a great place to live in.’
PGP research confirms that average freestanding prices in Gardens, for example, have accelerated steadily since 2012 – increasing by about 20% each year in 2013, 2014 and 2015. The average price of a house in 2012 was R2,7m while in 2015 (year to date) prices are averaging R4,75m – an increase of 75,9%.
Unit sales were strong in 2010 and 2011 (162 and 135 respectively) and have since fallen back, but have gradually strengthened, registering sales of 86 in 2012 to 90 in 2013 and 108 in 2014.
In the sectional title market, average Gardens apartment prices have been recovering from a 2011 low of R1,05m. They have increased steadily each year, with strong acceleration in 2015 – averaging R1,585m, an increase of 17,4% from 2014 levels. From 2012, prices have risen by 34,6%.
Unit sales were very strong in 2010 and 2011 (162 and 135). They fell to 86 in 2012 then gradually recovered to 108 last year – a 25,6% increase.
West Coast access
Blauwberg was the first area to be linked to the central city via MyCiTi in 2011 (the airport route was already operating). Emarie Campbell, the PGP franchisee for the Western Seaboard, says this has supported property sales.
‘The minute the service came in, the buses (whatever the size) were packed. People bought into it like you cannot believe. It’s now made people look at the Western Seaboard as a place where you can fight the traffic.’
Recent commuter statistics (August 2015) support this. The most popular MyCiTi stations currently include Table View with 163 928 recorded instances of boarding, transfer and alighting, Atlantis with 148 992, Dunoon with 76 310 and Melkbosstrand at 67 919.
Campbell says the users range from work commuters to UCT students who travel to town and then catch the Jammie Shuttle. ‘Previously students would have had to use a car, or even stay in res.’ Parents also know that their children can get quickly and safely to school, and during the holidays, learners catch the buses to and from the beach while their parents are at work.
Campbell adds that she is selling a new development of one and two bedroom apartments from January 2016, ideal for single professionals, young people starting a family, and mature buyers. She expects its location – only 150 metres from a MyCiTi stop – to be a strong factor in selling the units.
PGP research shows that in Boubergstrand, average freestanding prices eased to a low of R2,2m in 2012 but have since rebounded. They increased from an average of R2,7m in 2014 to R4,2m in 2015 (year to date) – a 55.6% increase. There was a noticeable increase in unit sales in 2013 and 2014. These averaged 29 sales in 2011 and 2012, then rose to 43 and 41 in the next two years – an increase of over 40%.
Bloubergstrand sectional title average prices also reached a lower turning point in 2012 (R0,655m) before drifting higher to average R0.98m in 2015 year to date – an increase of nearly 50%. Unit sales accelerated from 27 sales in 2012 and 2013 each to 37 sales in 2014, approaching levels last seen before the recession.
Sunset Beach freehold average prices remained fairly stable at around the R3m level for four years, then accelerated strongly in 2015 – rising to an average of nearly R4m year to date (R3.959m) – an increase of 33,1%. Unit sales have not increased noticeably during the past couple of years – averaging between 35 and 41 units during the past four years. There have been 30 sales thus far this year (October 2015).
For Milnerton freehold properties, average prices declined from 2009 to 2012 but have increased steadily since 2012 – rising from R0,98m in 2012 to R1,5m in year to date 2015 – a 53% increase.
Unit sales have also risen steadily from a low of 1 405 sales in 2009 to 2 565 sales last year. Rate of annual sales has thus almost doubled since the low recorded during the recession. The number of sales rose 13,2% in 2012, 2.9% in 2013 and 6,6% in 2014.
Milnerton sectional title prices declined modestly in 2010 and 2011 but have since rallied, rising from an average of R0,7m in 2011 to R0,93m in 2015 (year to date). Prices rose by 1,9% in 2012, 6,3% in 2013, 15,7% in 2014 and up a further 6,2% in 2015 (year to date) – a cumulative increase of 33% between 2011 and 2015.
Unit sales similarly fell to a low in the midst of the recession (952 sales). There has since been a steady increase in sales each year, with particularly sharp increases in 2014 (+30,6% increase in sales) to 1 642 units.
Hout Bay access
Hout Bay is characterised by large-scale housing, apartments, smallholdings and cottages, often within gated communities or security estates, set against mountain backdrops.
Patrick Mainguard, PGP Principal in Hout Bay/Llandudno, says: ‘MyCiTi is a reliable, efficient, safe transport system. It’s an absolute plus for the economy, not only Hout Bay. It has made us so much more accessible to town, and schooling along the route. House prices have shown significant increases and MyCiTi certainly is a major factor in this.
‘International buyers are accustomed to public transport, so having it available in Hout Bay (and just at the top entrance to Llandudno) is another plus. Historically, Hout Bay has been a little republic far away. This is no longer the case,’ said Mainguard.
PGP Hout Bay agent Jeanne McCaig agrees: ‘When we sell to a client it’s great – wherever they want to buy, we can point out a MyCiTi stop.’
My CiTi has also been ‘terrific for tourism’, adds McCaig. ‘Visitors can jump on a bus at the airport and travel right through to us. This has really helped bed and breakfast property owners and been good for the whole community.’
Hout Bay freehold properties have shown a steadily rising price trend since 2009 – and a noticeable quickening since 2014. Prices averaged R2,58m in 2013, up to R3,3m in 2015, an increase of nearly 28%. Unit sales accelerated sharply in 2013 and 2014, growing by nearly a third between 2011/12 and 2013/14.
Average Hout Bay sectional title prices have gradually increased between 2012 and 2014, accelerating strongly in 2015 – up from an average R1.265m in 2014 to R16m in 2015 (year to date) – an increase of 26,5%. Unit sales rose from 40 sales in 2012 to 97 in 2013 and 111 in 2014. In the year to date (mid-October) 75 sales have been recorded.
Mainguard says that Hout Bay residents in their 50’s now catch the bus to town for sundowners and restaurants. ‘They see it as a fun thing to do and they are more aware of drinking and driving regulations.’ Younger people are already familiar with taking public transport, taxis or Uber on nights out, while many school children use the MyCiti service.
According to Transport for Cape Town, for routes in mixed traffic (where buses do not travel on dedicated red bus lanes), the link between Camps Bay and the Civic Centre records some of the highest number of journeys. Up to 137 736 boarding and alighting instances were recorded at stops along this route in August.
V&A Waterfront property consists mainly of high-end apartments and penthouses, with access to the marina and private docks for yachts and jet boats. In the vicinity of the harbour, more accessible property investment opportunities include R2,5 million one and two bedroom units at R2,5 and R4 million respectively.
Mariël Burger, Pam Golding area specialist in the Waterfront, cites another popular transport innovation – the ferry between the Convention Centre and the One&Only hotel. It’s taken into account by purchasers who are buying to let, whether the market is for longer holiday rentals, or shorter lets of one or more days for delegates attending a conference. With trips running every 20 minutes at a cost of only R40, Burger says visitors regularly make use of this direct route.
Another plus is the growth in safe cycling routes in the area, and connections via MyCiTi (bicycles are allowed on its buses) to more outlying routes surrounded by nature, such as Milnerton. These have supported apartment sales in the Waterfront area to buyers who enjoy cycling to work and exploring beautiful peri-urban areas over weekends.
‘We are selling a lifestyle, and cycling is part of its leisure and accessibility appeal,’ says Burger.
Waterfront sectional title average prices (there is no freehold) peaked at R7,25m in 2009, then drifted lower in the wake of the recession, according to PGP research. They reached a low point of R4,959m in 2013. Since then prices have accelerated sharply, averaging R8,4m in 2015 (year to date) – an increase of 69,4% from 2013 to 2015.
Unit sales fell sharply after the recession (54 sales in 2008) then descended to a low of 15 sales in 2011 and 20 in 2012. Sales rebounded strongly in 2013 (41) and 2014 (36).
PGP MD (Western Cape) Laurie Wener concludes: ‘Estate agents are looking forward to further roll-outs of MyCiTi and other public transport initiatives. There is clearly a need for these services. For example, in the southern suburbs, UCT has its Jammie Shuttle service and some schools have started up private bus services – one transports learners between Constantia and Rondebosch.
‘Whether you are marketing properties aimed at university students or international embassies, improved transport options can only add value. This is within a larger context of Cape Town being a stable residential market and the most popular tourist destination in Africa.’
Text and photographs: Supplied