While South Africa's luxury property market performance remains weak, increased activity - up by some 36% compared to 2019 in some areas - within the high-end price bands indicates those looking to invest into some of the continent's most sough-after locations are finding the value they're looking for.
The Seeff Property Group for example achieved a record R1,75 billion in sales for March, the highest in the group’s 57-year history, and concludes a great first quarter for the property market, says Samuel Seeff, chairman of the group.
Seeff also concluded a R45m sale of a penthouse to a German buyer at the Waterfront, the highest price achieved here in close to eight years.
The agency is in the process of concluding an even higher value sale in Plettenberg Bay to a buyer from the UK which will be one of the highest prices ever achieved for residential property in the town. This follows a recent R36 million sale to a UAE buyer in Fresnaye, several sales in Camps Bay, and two R20 million-plus sales in Constantia Upper to buyers from Zimbabwe and Malawi, respectively.
"Overall sales to foreign buyers across Cape Town’s Atlantic Seaboard and City Bowl are a whopping 36% higher compared to 2019 and is the highest in the past three years. Almost one third of all high value sales have been to foreign buyers who have paid some of the highest prices including the R45 million sale at the Waterfront.
Seeff says that while the luxury areas are doing exceptionally well in the price bands to around R5 million to R8 million (R18 million on the Atlantic Seaboard), sales in the R20 million-plus sector remains well below what it was in 2017. That said, sales are taking place across the board in the high-end areas from Zimbali to Plettenberg Bay and Cape as well as in certain Gauteng locations.
Generally, the market remains driven by the low interest rate with the highest volume of activity still below R3 million as first-time buyers continue taking advantage, but we are also seeing buyers upgrading, or investing or relocating to a “Zoom Town” for a better quality of life.
In the high-demand urban areas, buyers need to remain mindful that there are no “bargains” to be had as the market remains well balanced in terms of supply and demand, although some areas are seeing stock shortages, but predominantly in the lower price bands.
At the top end of the market, the picture is a little different, says Seeff. Here, buyers can find great value given that prices of properties, often not seen before, are now at about 20%-30% lower compared to 2017. Nothing has for example sold above R80 million on the Atlantic Seaboard over the last three years, well short of the R100 million to R290 million achieved prior to 2017.
Cape luxury market attracting Joburg buyers drawn to high-quality lifestyle
But it's not only foreign buyers who have their eyes on SA's high-end properties. The Cape luxury market has only increased in popularity among Johannesburg buyers due to Covid-19 says Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett. They are drawn to the safe, active outdoor lifestyle on offer, he says.
"The pandemic has brought about several changes among buyers, the most prominent of which is the move towards remote working which is allowing buyers the freedom to move further away from their place of work. After having spent so much time in our homes, buyers are now prioritising living in a home that can offer a high-quality lifestyle rather than living in a home that is merely within an easy commute from the office,"
According to Talitha Finkay of RE/MAX Living, the Johannesburg market is where many of her buyers within the Tamboerskloof and Camps Bay areas are now coming from. “The lifestyle these suburbs offer is a huge drawcard for buyers who currently stay in Gauteng. For example, I am currently working with buyers who live in Sandhurst and who so love being able to walk in Cape Town, something they say they cannot do from their multi-million Rand home in JHB.”
Many buyers are drawn to these areas due to their proximity to the city and the good schools, St Cyprian’s and The German International School for example, that are in the area. “It is a lifestyle that many high-end clients are drawn to as it is just a few minutes away from the CBD yet still within easy walking distance to iconic mountain trails and popular beaches. The lifestyle of Cape Town offers blue oceans, white beaches, and trendy restaurants all within walking distance to everything. It offers buyers an ideal lock-up-and-go luxury lifestyle that is incredibly appealing to those based in Johannesburg,” says Finkay.
To provide an example of the types of homes that are popular among Johannesburg buyers, Finkay mentions a three bedroom home in Tamboerskloof listed at R20.95 million. Owing to its architectural significance, the home recently featured in an article by Visi. Designed by award winning architects, the home is a stunning, organic contemporary oasis with expansive skyline and mountain views, bespoke finishes, and a soaring double volume ceiling with extended door frames and floor-to-ceiling windows that allow for an abundance of natural light.
The two three-bedroom apartments to which Finkay is referring are both currently listed at R19 999 000. The apartments are designed with ample space for entertaining or a private, peaceful retreat. The open-plan living is flooded with natural light from the large floor to ceiling glass sliding doors, which allow for an easy flow to the outdoor patio and pool area.
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“The other two properties that spring to mind when considering buyers from Johannesburg are found within an upmarket complex in Camps Bay/Bakoven called Boulder. 80% of the owners in this complex are either Johannesburg based or foreign. This complex is particularly attractive to this new market coming from Johannesburg because many are seeking out luxury villas with excellent security, ocean views and an easy lock-up-and-go lifestyle, as well as the best part being walking distance to all amenities.”
Astute buyers are using the opportunity to pick up great value
If you combine the value with what you can buy in SA in dollar, pound and euro terms, the value proposition is significant, not just for foreign buyers, but a lost opportunity for SA’s wealthy buyers. Astute buyers are using the opportunity to pick up great value, albeit few and far between, says Seeff.
The market remains active and given that the interest rate is expected to remain at the low end for most of this year, the primary residential market is expected to continue surprising on the upside. Well-priced properties can sell within days depending on area and price band.
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