The economic pressures and junk status notwithstanding, properties in the Cape are still fetching excellent prices according to Samuel Seeff, chairman of the Seeff Property Group. Seeff has concluded a number of recent high value transactions on the Atlantic Seaboard including R54m for three sales ranging to R27m in Camps Bay, a single sale of R82m in Fresnaye, a record sale of R32m in Hout Bay and R34m in Higgovale in the City Bowl.
A study done by Seeff, based on data from Lightstone and Propstats for the period 2011/2 to 2016/7, also reveals that Cape Town is now home to nine of the ten richest suburbs in the country, up from seven two years ago, says Seeff.
Clifton tops the list with an average selling price of R23 million. Only one Johannesburg/Sandton suburb, being Sandhurst ranks in the top ten at 4th place with an average selling price of R16.5m. This is two places lower since late 2015 while Westcliff and Dunkeld meanwhile have dropped off the top ten list altogether.
The top ten rank as: Clifton (R23m), Llandudno (R17m), Bantry Bay (R16,9m), Sandhurst (R16,5m), Camps Bay (R16,2m), Fresnaye (R16m), Waterfront (R16m), Higgovale (R16m), Bishopscourt (R15,1m) and Constantia Upper (R11,6m).
Seeff goes on to point out that the decline in the rankings of the top end Johannesburg and Sandton suburbs become even more pronounced in the R20m-plus super luxury sector.
High net-worth buyers are just not investing at the same levels in Sandton and even less in Pretoria East and, he says that the palatial homes there are still struggling to achieve the pace of sales and prices that the Atlantic Seaboard and City Bowl are achieving.
Lightstone data shows that for the Joburg/Sandton area, an average of 6-7 residential transactions priced above R20m were recorded annually between 2010 and 2015. This increased to 10 transactions over the last year. Only three Pretoria East residential transactions appear to have taken place since 2010.
Comparatively, 20-50 transactions were recorded for the Cape in the 2010-2014 period, rising to 67 last year; three times more compared to Joburg, Sandton and Pretoria East.
“By early June this year, there had already been 44 transactions above R20m generating over R1.1bn in revenue. Incidentally, 30% of these were to Joburg buyers, a handful from KZN and only a few foreign sales (mostly UK and German buyers), the latter being less than 10%, and”, says Seeff, “far less than commonly perceived”.
Where prices have comfortably reached the R100m-R200m-plus price levels on the Atlantic Seaboard, Pretoria East has only had a single sale of R45m (Waterkloof, 2014) and R66m in Sandton (Empire Place, Sandhurst, 2016). Even in the City Bowl, Seeff has just concluded a record R34m sale and in Hout Bay R32m.
Seeff adds that he would have expected the figures to have been reversed, i.e. Joburg/Sandton achieving more sales and much higher prices considering Sandton’s status as the wealth capital of the continent and the wealth there is enormous, he adds. Pretoria East is home to the premier government and ambassadorial belt and he would have expected that the figures in respect of these figures to be reversed.
“As we can see, there just is not the same level of confidence”. Why? Well, Seeff says that buyers and property investors, not just at the top end of the market, but across the board, want to know that they are investing in areas where service delivery and zero tolerance for corruption are hallmarks. “They want to know that their investment is not just safe, but that it will grow in value”.
The shift in government in both the Johannesburg and Pretoria metros have been welcomed, but Seeff says that only once major inroads have been made their in terms of service delivery and cutting corruption, can we expect sales volumes and prices at the top end to start catching up to the Cape.
“The Atlantic Seaboard average selling prices (full title) have more than doubled over the last five years (since 2011/2012)”, adds Lance Cohen, Seeff’s luxury market specialist for the Atlantic Seaboard. The biggest gains have been in Fresnaye (+167%) and Camps Bay (+128%), the latter attracting the highest number of R20 million-plus sales since.
“Where only Clifton topped the R15m ave price mark, there are now seven (7) Cape suburbs above this range while Clifton now tops R20m for full title property”, says Cohen. “Top end luxury properties and locations can now range to R185m-R300m”.
Seeff compares what you can buy on the Atlantic Seaboard compared to Sandton and Pretoria East:
- “In Atholl (Sandton), you can get an 818sqm house with extras such as a wine cellar, outdoor entertainment area, staff accommodation, multi-car garaging and a swimming pool for R10.9m. A similar house on the Atlantic Seaboard, Camps Bay for example will cost R18m-R32m and in Bantry Bay as much as R30m-R40m”.
- “In Sandhurst (Sandton), a palatial French-chateau styled house with spectacular interiors and bespoke finishes and parklike grounds, is priced around R48m. A comparative property in the Atlantic Seaboard suburbs of Clifton, Bantry Bay and Fresnaye will cost around R75m-R185m”, says Cohen.
- In the exclusive Mooikloof Equestrian Estate (Pretoria East), a palatial 2291sqm home, set on land of 10000sqm, the grand homestead with seven bedrooms, luxurious living areas, a bar, wine cellar, home cinema theatre, huge gymnasium and sauna, tennis and squash courts, an extra length lap pool that leads from an enormous entertainment patio with pizza ovens, an outside boma, staff accommodation for three people, multi-car garaging and top class security is priced at R26m. A similar property in the Cape Town Southern Suburbs top areas of Bishopscourt and Constantia in Cape Town, has sold for R66m.
“Land sizes are generally smaller in the Cape, as are the houses, especially when you look at the Atlantic Seaboard, although there are exceptions in Bishopscourt and Constantia. What you get in Cape Town though, is the fabulous location and lifestyle, underpinned by confidence and a more solid foundation, service delivery and an intolerance for corruption”. “This”, concludes Seeff, “is arguably the biggest lesson coming out of the growth of the Cape property market and continued influx of people moving to the metro from other regions”.