For investors and buyers looking at high-end apartments, South Africa’s three top-tier areas, according to New World Wealth’s quarterly residential update, are Cape Town's Atlantic Seaboard, Umhlanga's Lagoon Drive and Central Sandton.
SA’s ‘Big 3’ prime areas
Prime apartment prices in SA declined in the first quarter of 2018, however, while prices in Cape Town and Sandton are down, prime apartments in Umhlanga and surrounding North Coast areas have shown an uptick in prices. The indices track the average square metre prices achieved in selected prime 200 to 400 square apartment complexes.
The Q1 2018 update showed apartment prices in Cape Town’s Atlantic Seaboard (Bantry Bay, Clifton, V&A, Fresnaye, Camps Bay) had contracted from around R75 000 per square metre in December 2017 to around R72 000 per square metre as of end March 2018.
“This is probably due to the drought which has harmed the residential market there,” says Andrew Amoils, head researcher at New World Wealth. “Cape Town also had a poor December/January holiday season with many travellers staying away from the city due to the drought - this would have negatively impacted on the number of potential buyers.”
Prime apartment prices in Central Sandton are also down, from around R34 000 per square metre in December 2017 to around R33 000 per square metre in March 2018.
But KwaZulu-Natal’s hotspots have seen a rise in prices, with prime apartment prices in Umhlanga (Lagoon Drive) having risen from around R36 000 per square metre in December 2017 to R37 000 in March.
“This is possibly due to the fact that many foreigners and locals are now going on holiday to KwaZulu-Natal instead of the Western Cape due to the Cape Town drought impact,” says Amoils. “There is also an uptick in prices in surrounding areas such as Ballito, Zimbali, La Lucia and Zinkwazi.”
“By focusing on sales in certain apartment complexes one can get an idea on how square metre prices are changing,” says Amoils. “This does not require a large sample. Normally for an area such as Bantry Bay, tracking three to four prime apartment blocks can give one a very good indication of price movements.”
He says the only limitation of these indices is that they only work well on apartments as houses normally have gardens and additional land which is difficult to value on a square metre basis.
According to New World Wealth, it is difficult to tell if the land redistribution issue is negatively impacting on residential prices. “In our view, it is certainly a possibility,” says Amoils.
Top 10 most expensive streets in SA
The Ridge and Cliff Road in Clifton, Cape Town, top New World Wealth's most expensive streets list, followed by Victoria Road in Clifton and Bantry Bay, and Dock Road at the V&A Marina in the City Bowl. See table below.
SA’s most expensive suburbs
Cape Town dominates the top 10 list with Clifton and Bantry Bay occupying all but one spot, which belongs to Dock Road at the V&A Marina.
The most expensive streets outside of Cape Town are Beachyhead Road in Plettenberg Bay and Lagoon Drive in Umhlanga, where you can expect to pay R8.6 million and R7.2 million for a 200sqm apartment, respectively.
Clifton tops the list with a 200sqm apartment costing on average R16.4 million, R15.2 million in Bantry Bay and R12.2 million in Fresnaye. In 12th position, Umhlanga's prime 200sqm apartments go for R7.2 million and in 15th spot, an apartment in Sandton Central would cost you in the region of R6.8 million. See table below.
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