Southern suburbs apartments offer an excellent property investment opportunity

Cape Town’s Southern Suburbs are quickly becoming a sought-after area for apartment sales and rentals

Property investors, keep your eyes on apartments in the Southern Suburbs for your next property investment opportunity. You won’t be alone but may be left behind if you don’t act fast. Propstats data reveals that the area has had about one apartment sale each day, with 355 sold in 2022. The average selling price rose significantly to roughly R1.883 million in 2022 from R1.6 million in 2021.

Urbanisation, growing traffic, time restrictions, and the desire for a secure living environment draw people to purchase and rent apartments.

This tendency could be attributable to an increase in higher-priced sales, notably in luxury new-build flats that provide a luxurious lifestyle. In fact, one of the biggest trends in Cape Town is the rise of apartment living, and you can’t afford to ignore it if you’re seeking a property investment opportunity.

Why are Southern Suburbs Apartments an Excellent Property Investment Opportunity?

Apartment complexes are often well-managed and meticulously maintained, so owners and tenants do not have to worry about security or essential maintenance. This adds to the convenience and peace of mind provided by apartment living.

In high-demand areas with various convenient amenities, apartments are the most sought-after rental properties for buy-to-let investors.

Seeff also notes that apartments appeal to a wide range of prospective tenants - from young professionals to families - who are drawn to the greater quality of life offered by this more compact lifestyle, courtesy of apartment living.

Rental Yield Projections Reveal a Lucrative Property Investment Opportunity

One example of an outstanding property investment opportunity is Alphen Glen, a new development offering above-average rental returns projected based on actual rentals achieved. Rental yields range from 6.8% to 9% on a one-bedroom unit, and these yields are expected to increase over the next six years.

Considering the example of a standard one-bedroom unit with a parking bay and around 47 sqm, priced between R1,595,000 and R1,925,000 (depending on the units) and with no transfer duty payable, this investment could yield a monthly rental of R11,000 to R12,000.

With a projected rental escalation of 8% per annum over the next six years, the investor could see a rental yield of 7.9% in year one, increasing to 12.12% in year six. And as a bonus, the property's investment value would also increase, as new developments generally see more robust price growth.

Our experienced Property Practitioners are here to guide you through any new property investment opportunity, helping you achieve a reliable passive income stream through a buy-to-rent strategy. Contact us now to get started, and read our top property investment tips for more assistance.