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Savvy investors are eyeing Stellenbosch apartments
Category Property News
Buyers who are looking for solid investment properties should look no further than Stellenbosch where there is currently a window of opportunity to purchase the perfect apartment to suit all budgets in one of South Africa's most sought-after residential and tourist destinations.
According to Chris Cilliers, CEO and Co-Principal of Lew Geffen Sotheby's International Realty in the Winelands, there are now many great properties on the market due to the university being temporarily closed and tourism on the back burner.
"Many student accommodation landlords are only receiving partial rent or no rent at all and parents who bought flats for their university-going children are also now selling, either because their children will continue to study remotely or they have found themselves under financial pressure due to COVID.
"Owners of airbnb and other tourist accommodation properties are also feeling the pinch and many are finding it difficult to continue carrying the costs whilst their apartments remain empty."
Cilliers believes that this has created a unique opportunity for investors to get excellent value for money in the apartment sector, particularly in the sought-after central area, for considerably less than the usual value - and be poised to cash in when the time comes.
"The Universities and colleges will open again next year with many students needing accommodation again and there is also likely to be a stream of tourists once the flights have resumed after the peak of COVID has passed.
"European tourists, especially, who will have weathered the pandemic storm and a cold European winter will be very keen to come to South Africa for some sunshine if they are able to fly from early next year.
"So even if an investor has to keep an empty flat going for six months, paying the monthly levy and rates of around R4000 to R5000, that's maximum R30 000 but absolutely worth it if they are able to purchase an apartment at a much bigger discount than this total.
"First prize would be to have an existing tenant for the rest of the year but if the price is good enough it can also stay empty!"
Cilliers adds that tourist accommodation apartments may also be available fully furnished at a small extra cost and will therefore be ready for occupation when life begin to return to normal, which is especially convenient for investors who live elsewhere.
"There are opportunities at every price level from R850 000 for an entry level flat all the way up to R10m plus for luxury penthouses, all of which have offered significant returns over the past decade.
"We are currently marketing a stunning R11.5m penthouse in the historical heart of town that offers expansive open plan living, top-of-the-range finishes, views forever and three en-suite bedrooms which include a master suite on its own private level with a patio.
"And, at the entry level for just R1.295m, a spacious one-bedroom flat conveniently situated only a situated a stone's throw from the university's campus library, law faculty, drama- and education departments, with myriad options in between."
According to Cilliers, accessibly-priced entry to mid-level apartments have always been like hen's teeth, especially in and around the central area, which makes this brief window such a rare and gainful opportunity.
"In 2018 a total of 31 765 students were enrolled at Stellenbosch University, and that's discounting the other learning institutions like the Academy of Design and Photography and the Boland College.
"The town also attracts a large number of local and international tourists annually, many of which prefer the freedom and flexibility of self-catering accommodation at all price points.
Author: Lew Geffen Sotheby's International Realty