Cape Town’s R20 million-plus homes now in short supply, top prices reach R120 million

The rapid take up of stock in Cape Town’s luxury suburbs has spread to the R20 million-plus homes, which are now in short supply, particularly in the Atlantic seaboard suburbs, according to Lance Cohen of Seeff.

This home in Avenue Alexandra, Fresnaye, which was sold for R42m in 2012, has been remodelled by architect Stefan Antoni and is now expected to sell for around R120 million.

“Moving from an oversupply of stock early last year where these luxury homes were still selling for more than 20 to 30 percent below the listing price, these properties are now selling for within about 10 percent of the listed price because of tight stock levels,” says the agent.

“Sales of R20m-plus homes across the Cape metro for the last six months alone has for example already exceeded those of the whole of 2013. Although only about 27 properties worth just over R762m were sold in 2013, there have already been about 35 sales worth over R1 billion in the R20m-plus price sector in the six months from November to April.”

The highest prices in Clifton in 2013 were between R34m and R50m, whereas last year sales prices peaked at just under R56m to R70m in Clifton. Fresnaye reached just under R65m, Bantry Bay’s highest price was R42.5m and the Waterfront reached R32m. In Camps Bay as well, there has been an increase in luxury home sales, the most recent a Medburn Road home sold by Seeff for R24m.

Cohen says that the higher sales volumes and values are not surprising considering the general growth in wealth and increased appetite for property investment among wealthy people.

“The recent Forbes and Sunday Times Rich Lists, as well as a report by BankServAfrica all, pointed to a substantial growth in wealth and income at the top end of the market,” says Cohen.

“Buying patterns in this market differ greatly from other sectors and buyers are prepared to pay well into the upper millions for the right location and, of course, the views.

“Apartments on the sea side of Victoria Road, especially in Clifton and Bantry Bay now often command prices well in excess of R20m to over R100m and a top price of about R196m in 2013. This can amount to more than R100 000/m². Luxury homes now often sell for R40m to over R100m.”

Cohen says the hot spots for wealthy buyers tend to have remarkable views. Nettleton Road, for example, is the highest street in Clifton so the views are magnificent. It also offers privacy, which is greatly prized by wealthy buyers.

“Prices in Nettleton Road now range from about R40m to over R120m, significantly more than the highest price of R65m, paid for 34 Nettleton Road in 2010. A 1 242m² tract of land here, sold for R35m in 2012 was recently resold for R68.3m, almost double in just 18 months. Recently, we received an offer for R145m for two adjacent plots of 1 900m² and 1 912m². The offer has been rejected by the seller, which is an indication of the confidence in property here now.

“Clifton Road, another hot spot for its privacy and superb sea views, now has an average price of well above R20m to just under R56m for a luxury home sold here by Seeff last year, although prices actually range to about R75m for a designer home.”

In Fresnaye, Avenue Alexandra a luxury home that was sold for R42m by Seeff in 2012, has been gutted and remodelled by the architect, Stefan Antoni. Cohen estimates it will go to market at around R120m.

“Although almost half of Clifton property is leisure and investor-owned, Fresnaye and Bantry Bay are predominantly residential,” says Cohen.

“Fresnaye is especially popular with family buyers because plot sizes tend to be a little bigger, and there are some excellent private schools in the area.

“Bantry Bay is popular for its seaside apartment complexes as much as for its sea views. The most sought-after road here is De Wet Road where the average price is around R25m and the highest price is R65m. It tends to attract a mix of residential and some leisure and investment buyers.

“There is significant liquidity in the market right now with cash buyers aplenty, but not enough new stock to show buyers,” says Cohen.

“Demand is driven largely by local buyers although wealthy Johannesburg and Pretoria buyers are increasingly investing on the Atlantic seaboard. It also attracted about R1 billion in sales to foreign buyers from across the globe last year.”

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