Super wealthy boosts Cape Town property market

When it comes to super wealthy buyers spending upwards of R20 million for a property, Cape Town is by far still the sweetest spot in the country according to Seeff chairman, Samuel Seeff. 

Speaking at a media event earlier this month, Seeff said that while buying at the top end of the market is still highly selective, these buyers are nonetheless still spending well into the upper millions for the right property in the right location.

6 Bedroom House for sale in Camps Bay, Cape Town (Enigma Mansion)

Sales at the top end, R20 million-plus sector of the market across Cape Town is also increasing steadily year-on-year, he said. Between August last year and early August this year, about 40 properties worth just under R1,2 billion have sold in the price band above R20 million, not only on the Atlantic Seaboard and in the City, but for the first time since 2007/8 also in greater numbers in Bishopscourt. Seeff has scooped the bulk of the agency sales with 13 deals concluded to the total value of just under R423 million including the two highest prices achieved in the city for this year.

During the comparative 2012/13 period, about 34 properties worth about R1 billion sold while only about 22 sales to the total value of just under R627 million were recorded during the 2011/12 year. Activity over the last year points to a 17% year-on-year growth in the value of sales and almost 100% growth from just over two years ago.

Twenty nine of the sales were made on the Atlantic Seaboard including a single sale in Llandudno at R40,95 million and in Mouille Point at R22,5 million. Two sales were made in Oranjezicht (City Bowl) at R25 million and R27 million respectively. Nine sales were concluded in the Southern Suburbs including six sales in Bishopscourt, significantly more than in previous years.

4 Bedroom House for sale in Fresnaye, Cape Town

All but two of the sales were cash deals and over 80% were to local buyers (mostly from within the Cape), clearly indicating that South Africans still pay the highest prices in the country. While foreign buying on whole has been significantly up over the last year on the back of the still favourable exchange rate and improvement in the UK and Euro economies, the bulk of sales are still well below the R5 million price, said Seeff.

Only about seven of the forty top end sales were to foreign nationals - six to UK buyers and a single sale to a Nigerian buyer. Sales to UK buyers include a Clifton home for R31,5 million, a Bantry Bay apartment for R21,55 million, a V&A Waterfront apartment for R23,94 million, a Llandudno home for R40,95 million and two luxury homes in Bishopscourt at R24 million and R25 million respectively. A Clifton apartment sold to a Nigerian buyer for R26,7 million.

Not surprisingly, Clifton topped the list with 9 sales, says Atlantic Seaboard luxury market agent, Lance Cohen who concluded three of these sales including the sale of a luxury villa for R55,86 million and a 2,500sqm vacant plot for R70 million; both the highest prices achieved in the city this year. Only one home priced at R20,5 million sold in Camps Bay while five luxury properties sold for between R24 million and R30 million in Fresnaye. In Bantry Bay, about six properties sold, ranging in price from R20,5 million for a luxury home in Top Road sold by the agent to R42,5 million for a luxury apartment, sold by agents, Adrian Mauerberger and Rosa Karp.

The V&A Waterfront, that has seen brisk trade this year, boasts six sales including two luxury apartments in Pembroke sold for R24,51 million and R25,935 million (incl. VAT) respectively, both within a day of listing and, a unit in Palgrave sold for R23,94 million (incl. VAT) sold within a month; all concluded by agents, Ross Levin and Kim Bailey. The agents say that all of the top end sales were cash deals and were bought by local Capetonian buyers, save for the Palgrave apartment that sold to a UK buyer.

8 Bedroom House for sale in Camps Bay, Cape Town

Meanwhile, Bishopscourt agent, Ingrid McFarlane sold four of the six top end properties in the suburb, priced upwards of R24 million and R30 million for a luxury estate in Upper Sidmouth Avenue. All of these deals were concluded this year and for cash and include two sales to UK buyers; a Kirstenbosch Drive home sold for R24 million and a Salisbury Avenue property sold for the full asking price of R25 million. Aside from an increase in demand for luxury homes, vacant plots are also starting to sell for record prices, says the agent who recently sold two plots of about 1-acre in size each in Upper Primrose Avenue for R13,7 million and R14,3 million respectively.

The improved activity comes on the back of an overall better mood in the market over the last year and especially into this year, said Seeff. The Cape metro property market for example exceeded that of the Johannesburg metro last year; both in terms of residential sales volumes and value according to Lightstone data. With almost R16,7bn (12,043 transactions) in residential transactions, it generated about 36% more value compared to the Joburg metro's just under R12,3bn (11,645 transactions).

Activity in the top end, R20 million-plus sector across the Joburg metro also still significantly lags that of Cape Town, said Seeff. According to data from SAPTG (South African Property Transfer Guide), only about 6 transfers were recorded between August 2013 and the end of July this year. This includes three in Bryanston ranging from R20,6 million to R40 million, one in Atholl at R20 million, one in Hyde Park at R20,5 million and one in Morningside at R20 million.

Cape Town's growing international stature, wonderful climate and coastal lifestyle and selection of top class properties are the main draw cards for buyers. Aside from the global honour of being World Design Capital 2014 and a string of tourism awards, the city, both from a tourism point of view and as a prime spot for property investment, now features almost monthly in high profile articles in top international media such as the Wall Street Journal and the UK's The Guardian.

Both Cohen and McFarlane though cite a lack of new top end property listings coming onto the market as a significant draw back right now. Especially, given that we are heading into the traditional busy summer season, we expect buyer interest to further spike in the coming months. For top end sellers still holding back, this may well be a missed opportunity.

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