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Thursday Nov 22, 2012

Cape property market ready for bumper holiday season

Cape Town's property market is gearing up for a bumper season this festive period for luxury holiday rentals, with some visitors prepared to pay up to R60 000 a day for accommodation at popular seaside locations.

This 5-bedroom villa is renting for R50 000 a day over the December holiday season.

Ian Slot, managing director of Seeff Atlantic Seaboard, said if last year's visitors statistics for Cape Town were anything to go by, then landlords looking to capitalise on the demand for short- term rentals were in for a bumper tourist season.

"Already, our holiday and luxury villa rental agents are inundated with enquiries and about 80 percent of the short-term rental properties on our books have already been let for the summer season. There is a desperate shortage of leisure stock, especially in the luxury sector."

According to Cape Town Tourism, visitor arrivals into the Mother City over last year's holiday season was up 17.1 percent with an overall increase of 14.5 percent in the last quarter of the year. More than 80 percent were holiday makers and about 4 to 5 percent business visitors, he said.

Bryan Ginsburg and Lior Witz, agents at Seeff Atlantic Seaboard said: "While the majority of visitors opt for rentals in the more affordable sector at daily rates of between R2 000 and R2 500 a day, the Atlantic Seaboard is the main target for upper income and high net- worth visitors who are willing to pay rates of up to R15 000 a day for a luxury seaside apartment and R60 000 a day for a villa with a penthouse suite right on the ocean's edge."

Student accommodation has also become a vital component of the residential market, amid growing rental demand and a shortfall in university residency, said Seeff.

According to Knight Frank's 2012 student property report, the sector outperformed other commercial property classes globally even during the economic downturn.

The report said that locally the Department of Higher Education recorded a shortfall of about 430 000 student beds.

In addition to occupancy rates and rental yields, factors such as good maintenance, security, convenience and affordability were important to students and parents, said Seeff.

Accommodation within walking distance of tertiary institutions or on transport routes and within vibrant nodes with cafés, bars, clubs and gyms were very popular.

Mike Greeff, chief executive of Greeff Properties said Cape Town, having already achieved the accolade of design capital of the world, also boasts two further awards - Top City in Africa and Second Best City in the World, according to the Condé Nast Traveller 2012 Readers' Choice Awards.

"In December 2011 alone, Cape Town received around 260 000 international visitors. With a weakened rand, this number looks set to swell this festive season.

"What this hopefully means for the real estate industry is that we see renewed interest from foreign buyers."

Greeff added, however, that with the weaker European economy, foreign investors are determined to seek out value for their euros.

"The place we're most likely to see interested foreign investors is False Bay where beach front properties and those with ocean views are significantly cheaper than comparable properties on the Atlantic Seaboard.

"In fact 63 percent of our current buyers in Kommetjie, for example, are international, mostly from Germany and England. Following the festive season and into the first quarter of 2013, what we are most likely to see is an increase in local activity, as many people use this time of year to take stock of their lifestyles and make changes accordingly."

Cape Argus

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