Clifton has long been regarded as the most exclusive suburb in the country, accessible only to the super-wealthy who can afford to buy property in the enclave that is home to South Africa’s wealthiest street, but recent market-shifts on the Atlantic Seaboard have seen the gap close as its dynamic neighbors begin to achieve record highs.
This is according to Brendan Miller, Lew Geffen Sotheby’s International Realty Atlantic Seaboard and City Bowl CEO, who says: “Leading the pack in market growth are Bakoven and Bantry Bay, with the latter now occupying three places on Lightstone’s list of the top 10 most expensive streets in South Africa, which is a significant leap from just one in 2014 when only De Wet Road made the cut.”
He attributes this to several key factors, the main one being the surge of development in Bakoven and Bantry Bay in recent years which has galvanised the apartment markets in these suburbs, catapulting them into the lead in this sector.
“On the prestigious strip from Camps bay to Fresnaye, both suburbs showed the highest apartment price escalation measured over 6 years from 2010 to 2015, with an average nominal year-on-year growth of 13% from R4.8 million to R8.7m and 12% from R3.6m to R6.2m respectively with Fresnaye sharing the top spot”.
“Runners up during this period were Clifton with an average year-on-year nominal escalation of 10% and Camps Bay with 7%.”
Miller points out that the previous six year period was a very different picture when all but Bakoven and Clifton showed double digit price growth between 2005 and 2010.
That said Clifton still achieved the highest average apartment sale price since the beginning of 2015 and the end of the first quarter of 2016 at R11.5m, followed by Bakoven at R8.2m and Camps Bay at R7.7m.
Lew Geffen, Chairman of Lew Geffen Sotheby’s International Realty, says that the housing market in the area followed a similar pattern, with Clifton in the lead during the 2005 to 2010 period with a year-on-year increase of 13% when the average house price grew from R9.1m to R16.9m.
“Despite two big ticket sales of R70m and R100m in Clifton during 2015, the house market was slower than in previous years which resulted in the average house price remaining constant at R16.9m between 2010 and 2015.”
“The converse was true for Bakoven where the average house price increase between 2005 and 2010 was a subdued nominal 6%, whilst the following six year period saw the price jump by a whopping 16% year-on-year, increasing from R5.99m in 2010 to R12.58 during 2015.”
Camps Bay also enjoyed exponential growth during the latter period where the average house price escalated nominally by 13% year-on-year from just under R7m in 2018 to R12.58 in 2015, which is triple the growth seen between 2005 and 2010.
Whilst Clifton retained its crown by maintaining the highest average apartment price, in the housing sector the exclusive suburb handed the reign to Bantry Bay which achieved an average sale price of R18.03m last year with Clifton taking second place with R15.84, followed by Bakoven at R13.03m.
Geffen says: “Property investment in this exclusive strip on the Atlantic Seaboard has always been lucrative with consistent and healthy returns, and the current economic slump has not dampened the market”.
“Measured at the end of 2015, the average return on investment (%ROI) in the upper market suburbs for houses was 17% year-on-year over five years with Bantry Bay taking pole position with a nominal return of 21% during the same period”.
“Runners-up were Bakoven at a nominal 18% year-on-year return measured over six years, Fresnaye at a nominal 17% year-on-year over five years, Clifton at a nominal 16% over six years and Camps Bay at a nominal 15% over five years”.
Apartments fared almost as well with an average return on investment of 16% over five years measured at the end of last year. Bantry Bay and Clifton shared pole position at a 19% year-on-year escalation of 19% over four years, followed by Bakoven and Fresnaye at 14% over five and six years respectively.
Says Geffen: “Clifton continues to hog the limelight with a very high return on investment as it has a much higher number of apartment blocks with direct ocean views and, in many cases, direct access to its pristine beaches.”
He concludes:“What is most interesting is that, despite the current economic downturn, investors in this area are still predominantly South African, with locals having bought 81% of all houses during the first quarter of 2016 and 74% of all apartments.”