Rapid transit to boost Cape Town suburbs
Phase one of Cape Town's rapid transit system, to be completed by the second quarter of next year, is expected to boost the popularity ' and home prices - of some suburbs.
Fanie Lategan of the Chas Everitt International Western Seaboard office says the system will put the Cape Town CBD within easy reach of suburbs such as Blaauwberg, Table View and Parklands.
'The convenience of rapid transit, such as time savings and escaping traffic delays, is expected to boost popularity of these suburbs among people who work in the city centre,' he says.
'Buyers in the black middle to upper income bracket have already become a strong force in the Parklands and Table View areas and we expect the trend will continue for the foreseeable future, and be strengthened by the rapid transit system.'
Lategan says sales volumes in the local market as a whole, however, is still substantially down on last year although prices have held steady.
'The big crunch started in about July last year following the international sub-prime crisis, the National Credit Act, high interest rates and banks' cutting back on granting mortgage bonds. However, thanks to substantial drops in interest rates ' to levels last seen at the peak of the previous boom - the market started turning around in May this year and by June the change was significant.
'But the backlash of the credit crunch left many people in a debt trap and they were forced to sell their homes. Many houses were auctioned, often at prices below fair value. Fortunately banks came to the rescue of owners in distress with the quick sale schemes. They priced the properties to sell in a though market but also made sustantial debt concessions to clients. Prices achieved with the quick sale solution are significantly better than with auctions.
'Quick sales had a noticeable impact on sales volumes in especially Blaauwberg, Table View and Parklands.
'And although the improved market is nowhere near the boom days of four years ago, the current steady growth in volumes and prices is much more sustainable than the frenzy of 2004/2005.'