Only last year locals caught sight of a well-preserved sixtysomething with bouffant hair strolling in shorts around Bracelet Bay — just Michael Douglas paying a visit to the wife’s parents, who live above the cove. It’s an area of flash cars, celebrities and swanky new beach apartments that overlook the sea. It is not Miami or Florida, however, but a district of Swansea, south Wales, known as SA3. And its property market is positively booming.

The area covered by the postcode is a slice of suburban Swansea that straddles the coast road between the Mayals, where 1970s rock star Bonnie Tyler lives behind high walls, and the pretty little coves around Langland Bay. SA3 has a lot going for it. Few coastal areas have a finer backcloth than the splendid curving shore of Swansea Bay, and the buzzing village of the Mumbles, the local commercial centre, is newly trendy with its bars, bistros and top-quality shops.

In terms of price appreciation, the area is hot. Two years ago 35 flats at the Osborne — a former hotel overlooking Rotherslade Bay — sold in a single evening for between £170,000 and £425,000 each. The same flats now resell for between £235,000 and £625,000 — a rise of about 20% a year. That’s steeper price appreciation than even Sandbanks, Dorset — the seaside town with the highest prices in the UK — which recorded rises of only 15% last year, albeit from a much higher base.

Building plots, too, are now being bought for silly money. An acre of rough land on the Mumbles seafront recently sold for £2m; it is not unusual for a self-builder to spend £650,000 on a perfectly good home in one of the more desirable villages, such as Caswell, raze it to the ground and build another on the site.

Why is SA3 suddenly so popular? “It’s largely due to the new prosperity in Cardiff and the booming house prices there,” says Trevor Carr, director of John Francis estate agency. “In about 2003, people looking to buy in Cardiff found they could get better value and enjoy a better quality of life here than they could in the capital.

“They started buying weekend places in SA3 and some took to commuting. At the same time it became increasingly popular with expat retirees, who had made money from property in England.”

It’s not only the great and the good of south Wales who are attracted to the area. Laurie Blackmore, 57, is a petrochemical engineer based in Monaco, where he divides his time between his boat in Monaco harbour and his flat.

Blackmore used to have a UK base in Tenby, Pembrokeshire, but two years ago he replaced it with a two-bedroom flat in the Osborne. “The extra drive down to Pembrokeshire was becoming a drag — this area is far more convenient,” he says.

“I visit about once a month, catching a two-hour flight from Monaco to Bristol before getting the fast train straight to Swansea. There’s secure parking for my car and it’s just a short walk into the Mumbles, where there’s far more to do than in Pembrokeshire. I love it here.”

Undoubtedly the most radical new development in the area, in terms of design, is Regalian’s Elev8@Clyne, which hit the local headlines this summer when Sian Lloyd, the weather presenter, and her fiancé, Lembit Opik, the Lib Dem MP, were seen viewing the site. The development is an arc of gleaming white, LA-style minimalist homes built around the former Clyne Castle, which has been turned into flats.

The houses, with their enormous glass-fronted living rooms, curved white interior walls and views over the sea, have a nautical feel. And their price — £1.25m for the largest property — has only added to SA3’s reputation as Wales’s Sandbanks.

Lee Woodman, 26, a web developer who also owns a home catering company, camped out in a queue for four days and nights to secure his £295,000 apartment in Clyne Castle itself when it came on the market two years ago.

“It was a great way to meet your new neighbours,” he says. “And it was worth it because this is a superb location. Swansea is 10 minutes away and I can be on a Gower beach, with no more than 50 people on it, in 20 minutes.”

Most of the new-build homes in SA3 take the form of flats. Some of the imposing Edwardian family homes are being sliced up to make flats and several of the big hotels have found selling to developers a more profitable option than tourism. The Victorian gothic shell of Langland Bay Manor, for example, is currently being renovated and converted into 27 flats, which are for sale for between £225,000 and £650,000 with Dawsons estate agency.

Does SA3 have further investment potential?

“I think the area is a long way from peaking,” says Woodman. “The shops and businesses are improving but they haven’t yet got a strong enough sense of their own identity. The area also lacks first-class restaurants. We need a Rick Stein.

“But when the younger generation of business people come through, SA3 will really take off.”

Dawsons, 01792 301 020, www.dawsonsproperty.co.uk; John Francis, 01792 405 470, www.johnfrancis.co.uk

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