Correctly chosen Western Cape vacant land still gives excellent returns.
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Correctly chosen Western Cape vacant land still gives excellent returns
Magnus Heystek, the widely respected Johannesburg financial consultant, recently went online with a comment about the poor financial performance of much South African residential property. Heystek's article was titled SA property market: where dreams come to die. Heystek conceded, however, that the Western Cape was bucking the trend and that in this province property continues to be a sound investment option, with one exception :vacant land, he asserted, is never a good buy, even in the Western Cape.
Rowan Alexander, Director of Alexander Swart Property, has now also gone online saying that he disagrees with this statement.
Many Cape investors can show that, provided their choice has been careful and has taken into account the market trends, they have seen significant growth in the value of vacant erven that they have bought.
A buyer at the Rabie Property Group's Durbanville development Clara Anna Fontein, said Alexander, recently reported that three plots bought shortly after the launch two years ago for R1,8m each, can now be resold for R2,5mil to R2,7m. As demand is strong, further increases in the value of the still unbuilt plots can be expected.
Similarly, says Alexander, erven sold five years ago by Alexander Swart (then operating as a national group franchise) in Sonkring, Brackenfell, for R385 000 can now be resold for R950 000.
Even allowing for the cost of acquisition and disposal, investors here have been getting a 14% annual return. This is, of course, better than average but it shows what can be achieved if you deal with a reputable agent who knows the market in which he operates, steers you in the right direction and is out to build a long term relationship with his clients in return for the good advice he gives.
These, said Alexander, are only a few examples of the good performance of vacant land throughout the Cape Town urban areas and, as yet, there are no signs that the regular price escalations will slow down significantly.
For further information please contact Rowan Alexander on cell phone number 082 581 3116 or by email rowan@asproperty.co.za.
Author: Independent author
