Luxury housing leads Cape property recovery

Luxury homes in the R10 million and more category have led the way out of the residential property lean years, according to statistics collated by Pam Golding Properties (PGP) Western Cape.
Total industry sales during the period since the start of 2008 to the first quarter of 2014 in this sector of the Cape Town property market have exceeded the previous six years by 141 percent in units, with an increased value of 181 percent, in a period considered to be largely constituted of slump years.

This luxury residence in upmarket Bishopscourt in Cape Town’s Southern Suburbs was recently sold for R26.5 million by Pam Golding Properties.
Based on Lightstone data related to total sales on the Atlantic Seaboard/Cape Metropole, luxury properties have been near-bulletproof. “They have held and exceeded their value and marketability in the toughest of economic times,” says Dr Andrew Golding, CE Pam Golding Property group.
“In the sector under review, during the six-year period from 2002 to 2007, 334 qualifying residential properties in excess of R10 million each were sold, to the total value of R5.182 billion,” he says.  “During the following 6.5 years, from 2008 to the end of the first quarter of this year (2014), 806 similar properties were sold to the total value of R14.54 billion. “The remarkable increase in volume and value was in spite of the fact that 2009 to 2012 were considered to span the global economic crisis.”
Individual areas demonstrated the following growth patterns: Atlantic Seaboard - units 153 percent, value 190 percent; City Bowl - a massive 430 percent in units (10 to 53 houses only) and 558 percent in value; Southern Suburbs - units 118 percent and value 113 percent.
Laurie Wener, Managing Director of PGP Western Cape Metro region, who commissioned the evaluation, says that each of these regions of the Cape Peninsula has its own specific appeal that dictates the pattern of sales.  The Atlantic Seaboard attracts those who are scaling down in terms of the size of their homes, but by no means in price. “Scarcity value, unparalleled lifestyle and idyllic climate conspire to keep the individual prices, irrespective of property size, very high. Added to this, but not exclusive to the area, is its investor focus, and cachet with foreigners, rich retirees and magnates.

“The City Bowl/Central City is limited in size by geographical boundaries, and development opportunities are also limited, which creates a scarcity value. The area attracts an eclectic mix of high-earning professionals, creatives, families, and young entrepreneurs who love the combination of historic Cape environment and trendy atmosphere.
“The Southern Suburbs area remains the indisputable choice of those who want level gardens for their children and a tranquil urban environment in green surroundings. While the traditionally wide choice of schools and tertiary education facilities has always been a major attraction, the migration to this area has been somewhat tempered by an increasing shortage of available places at both private and state schools. But with security an abiding preoccupation, the growing number of gated estates offering a variety of sizes, finishes and prices, maintains the popularity of the Southern Suburbs,” says Wener.
“The Cape Peninsula is not alone in its strong attraction as an imperative South African property destination, but it has the edge of sea and mountain, its wineland interior, spectacular scenery and a general sense of freedom. It’s always going to be a property investment leader.”

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