In a world where high-net-worth individuals seek not only luxury but also strategic investment opportunities, these buyers are embracing a new trend – the acquisition of homes on multiple continents to diversify their property assets across the globe in an effort to offset volatility in traditionally stable markets.
READ: Cape Town ranks fifth on Savills World Cities Prime Residential Index
According to the latest Lightstone report, foreign appetite for South African residential property is on the increase with investor numbers steadily rising since 2019, and, whilst Gauteng boasts the highest number of foreign buyers, the Western Cape enjoys the lion’s share of big-ticket sales.
And this accelerating trend, which has seen 64% of luxury foreign sales this year being in the Western Cape, is corroborated by Cape Town property professionals, especially in the most sought-after areas where there has been a notable spike in sales to foreign investors since the end of the pandemic.
Joanna Thomas, Constantia Area Specialist and Stephan Thomas, Constantiaberg Secure Estate Specialist for Lew Geffen Sotheby’s International Realty, both report a sharp increase in foreign buyer interest with a number of high-ticket sales concluded during the past year.
"There has been a lot more interest from UK and European buyers, mainly HNW and UHNW individuals, and the R20 million plus price band has been very active, with a few of sales exceeding R40m."
Historically, high-net-worth individuals, particularly those from Europe, favoured investing in luxury properties within their own continent and renowned cities like London, Paris, and Monaco have held a timeless appeal.
However, recent geopolitical uncertainties, economic fluctuations, and shifts in global dynamics have compelled investors to rethink their real estate portfolios.
"Traditionally perceived as a safe haven for real estate investments, Europe has recently faced challenges that have prompted high-end investors to reconsider their options with factors such as economic instability, changing regulatory landscapes, and the impact of events like Brexit contributing to a shift in perception," says Stephan.
"Multicontinental property portfolios offer a hedge against economic uncertainties in any single region and provide an opportunity to capitalise on the unique advantages and growth potential of different markets."
According to Joanna, most foreign buyers in previous years were ‘swallows’ who spent the summer in Cape Town to escape the European winter but there has been a notable shift in the past two years.
"In addition to the traditional swallows we are now also seeing an increase in the purchase of second and even third holiday homes which are occupied for much shorter periods of time – and these are often much higher value properties.
"Over and above our individual sales, a coordinated effort between the secure estates and Upper Constantia along with our colleagues on the Atlantic Seaboard, recently achieved four sales totalling around R204 million.
"All four of these sales were to HNW foreign buyers who paid in cash with one being a resident in South Africa whilst the other three properties were bought as holiday homes."
She adds that this is not only indicative of shifting trends but also highlights the importance of appointing an agency with a strong network.
Here is a look back at the role of a real estate agent and what you need to know
According to the Seeff Property Group, (The role of a real estate agent : What you need to know) agents do not only sell or rent property on behalf of their clients, but also have their ear to the ground in terms of what current property values are, how much properties might sell for, and what is happening in the property market.
With so many newcomers to the market, often making lofty promises of high prices and quick sales, it is easy for sellers to get caught up in the hype. A property which simply sits on the market with no or low offers can be very frustrating for buyers.
The role of a good agent in getting your property sold as fast as possible, and for the best possible price cannot be overstated, says Samuel Seeff, chairman of Seeff. A bad agent could leave you with a lengthy and frustrating sale process.
Regardless of when you are selling, but especially in the current market, it is important to ensure you choose the right agent for your property and market. If you are not aware of who the best agents in your area are, ask around for recommendations from neighbours or friends.
Always meet the agents in person before appointing them:
This will give you a chance to ask questions and assess the agents. Check how long they have operated in the area. Each area is different and local expertise is a vital point of advantage for any seller.
Look for a successful sales track record:
Ask for a list of their recent sales in the area, how long it took to sell, and the prices achieved. A strong sales record is an important indicator of the likelihood of success and that the agent could find the right buyer for the property.
A strong brand and network is another advantage:
An established brand will have a strong online presence for maximum exposure of your property backed by the latest technology and marketing and sales methodologies. They will use best practice to market and sell your property.
Look for someone who will assist every step of the way:
Selling a property is a complex process with many legalities to be taken care of. A good agent will explain the process and guide the seller to ensure they have all the necessary documents and maintenance done for an efficient selling process.
Choosing the right agent to sell your home cannot be over-emphasised, especially if you are selling right now as you will not want to waste time, says Seeff. Choose the right agent and ensure you follow their advice.
READ: Pretoria, an excellent bet for first-time property buyers | Top global trends in upmarket estates
"What intrigues me at the moment,” says Stephan, "is the apparent turnaround in foreign investor sentiment, from overly cautious to a lack of concern regarding the challenges facing South Africa.
"In years gone by, it only took a water shortage or a bit of civil unrest to have international investors running for the hills, but these days, when you ask real, live active buyers what their concerns are, or what their risk aversions are, they have very few.
"The current view, especially of HNW buyers, is that the Cape Town property market remains extremely attractive, relatively cheap by international standards and there is little concern in terms of currency stability, civil unrest, service delivery, or political stability and they are happy to spend up to R25m or even beyond."
Joanna agrees and says that she has been seeing many more HNW buyers prepared to take what they consider to be a calculated risk.
"We often hear these buyers say that they are investing in a lifestyle and, in a post-pandemic world, are looking to live more in the moment. And, with the traditionally ‘safer’ global investment options not being as stable anymore, Cape Town is therefore considered a top destination for diversifying."
Want all the latest property news and curated hot property listings sent directly to your inbox? Register for Property24’s Hot Properties, Lifestyle and Weekly Property Trends newsletters or follow us on Twitter, Instagram or Facebook.
Print
