Cape Town set for sizzling property summer

News > news - 12 Dec 2013
The residential property market in Cape Town – and especially along the Atlantic Seaboard – looks set for a bumper sales season this summer, following an unusually busy winter.

?4 Bedroom Apartment for sale in Bantry Bay
“There is definitely no shortage of buyers,” says Lew Geffen, chairman of Sotheby’s International Realty in SA, “particularly at around R3m, which is the average price we are now achieving on the Atlantic Seaboard. Show house attendances are way up and sales volumes at this level are currently 58% ahead of where they were at this time last year.”
Currently most buyers at prices below R20m are Capetonians looking to upgrade, he says, as they avail themselves of the unusual opportunity created by realistic pricing and low interest rates to acquire some of SA’s most sought-after real estate in Atlantic Seaboard suburbs such as Clifton, Bantry Bay and Camps Bay. 
“However a fair percentage are also from Johannesburg and other upcountry locations, and we expect this contingent to increase over the summer holiday season.Cape Town is becoming the preferred city of residence for many Gauteng professionals and captains of industry, who relocate their families here and commute weekly for business. And the year-end is when most such buyers have time to visit and view properties for sale.”

?5 Bedroom House for sale in Camps Bay
Meanwhile, Geffen says, there is already a shortage of stock to meet the current demand in the under-R20m sector, and properties are selling rapidly within about 15 to 20% of their asking prices.
“We are thus definitely back in a sellers’ market, although it is highly unlikely that there will be price escalations anything like those experienced during the last property boom. The banks are still taking a very cautious view of the market’s prospects and only granting home loans on very conservative valuations.”
As for foreign buyers, he says, they are generally only evident in the over-R20m price category, and even here probably account for only 10% of purchases.

?4 Bedroom House for sale in Higgovale
“However, their numbers have been growing again recently - and only partly because of the currency discounts created by the recent drop in the rand exchange rate. The other reason is that the demand for luxury property among high net worth individuals (HNWIs) is on the rise again worldwide – and that the Atlantic Seaboard is a favoured location for such investors.”
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