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Monday Sep 11, 2017

Views usually add a premium to a property price - but not always

A number of court cases in recent years concerning developments or home alterations that have threatened to obstruct neighbours' views reveals just how much value home owners put on views - of the sea, the mountains, or even of the city lights.

This is also evident from the fact that in any suburb with varied topography, the homes "on the hill" that offer views will generally sell for more than those below, says Gerhard Kotze, MD of the RealNet estate agency group.

Similarly, at the coast the homes or stands with a good sea view always fetch higher prices than those without views or with only partial views. Even inland many luxury apartments sell for more if they offer good views.

Despite this, Kotze says there is no clear-cut answer as to just how much value a view adds to a property.

"In an area where most homes have views, you'll probably pay less of a premium to have one than in an area where view homes are scarce. On the other hand, buyers will usually pay more for an unobstructed view - for a home right on the beachfront, for example - than one that looks across the rooftops of other houses or filtered through trees.

"The higher the average price of homes in an area, the more you're likely to pay for a good view."

In a coastal area, where two-bedroom apartments cost an average of R600 000, for example, Kotze says one can expect to pay an additional R50 000 to R70 000 for a clear sea view from a balcony, while in another where three-bedroom homes cost around R2.5 million, one can pay an additional R500 000 to R800 000 for that view.

In lifestyle estates, where views are usually protected by rules and architectural guidelines, Kotze says there is "virtually no limit" on what buyers will pay for the best stands or the homes with best views of golf courses, mountains or wine farms.

Meanwhile, in inland suburbs, buyers who want sweeping city views could pay R1m or more than for a similar property without views - depending again on the status of the area, the rarity of the view, and the condition of the property.

"In some areas buyers are even prepared to pay well for older homes with good views just to acquire the land and position. They will then demolish the existing buildings and replace them with modern homes that maximise those views.

"This is not, however, that common, and in general buyers will not be happy to pay a 'view premium' unless the property as a whole is in good condition and has amenities such as a second bathroom or proper garaging that warrant the higher price.

"Most buyers do not want to embark on extensive renovations or additions."

Buyer profile will also affect the value equation, Kotze adds.

"If most buyers in an area seek homes in which to raise children, but all the view homes available there are on a steep hill and tricky to access or without gardens, those properties may actually be quite difficult to sell and fail to command any premium at all. Buyers will opt for more level stands that are easy to access, or they will go elsewhere.

"Of course, no view can compensate for a neglected neighbourhood at risk of going into a decline. In fact, it might even become a hindrance, since it will be harder to make a profit on the property you paid a premium for if prices in the area start to fall."

Property
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