"Market has felt the pinch with a notable decline in sales at the top end."
Reflection and forecast for area
Southern suburbs: A mainstay of the Cape property market, sales here are stable but historically lower than the boom of previous years, says Simon Raab, director of Greeff Christie’s International Real Estate. Asking and selling price difference has increased, as has the average length of time on the market. This is expected to continue into 2019, but should ease after the elections, Raab says.
City Bowl and Atlantic seaboard: It was inevitable this market would need to cool down, says Ian Slot, managing director of Seeff Atlantic seaboard and city bowl. This correction was exacerbated by the poor economy, water crisis, political issues and a decline in tourism and semigration.
“This market has felt the pinch with a notable decline in sales at the top end. We’ve seen the market decline by about 20% and the average selling price by about 9% year-on-year, predominantly due to fewer high-value sales this year along with a slower offshore/foreign buyer market.”
Lance Cohen, Seeff luxury market specialist, describes this as a “year with little interest from high net-worth buyers”. However, the area remains “the top strip of residential real estate in the country”.
This area is still “the place to be” for young buyers, says Ryan Greeff, director Greeff Christie’s International Real Estate city bowl and Atlantic seaboard.
Areas to take note of as possible investment hotspots are Vredehoek, Higgovale and Oranjezicht.
Southern Peninsula: All signs point to Noordhoek increasing in popularity, says Jeremy Barnes, regional manager of Greeff Christie’s International Real Estate’s South Peninsula division. “Kommetjie and Scarborough continue to offer village living paired with modern infrastructure that facilitates remote working. A commercial development in the Simon’s Town area has led to increased interest. There are still excellent value for money properties available but stock is limited.”
Other promising hubs: With growth of 12% in the second quarter of this year, FNB’s property barometer shows Somerset West, Strand and Gordon’s Bay experienced a promising upswing in prices, says Greeff’s Mike Greeff. Observatory, Woodstock and Salt River showed price inflation of 17.6%.
Mother City among wealthiest
The 2018 Africa Wealth Report, which looks at 17 African countries and 23 African cities, discloses that total individual wealth held in Africa amounts to about $2.3 trillion (R33 trillion) – a figure which is expected to rise by 34% over the next 10 years, reaching $3.1 trillion by 2027.
Joburg, Cape Town, Durban and Pretoria are all included in the top 10 wealthiest cities in Africa, says Pam Golding Properties’ Andrew Golding.
“Prime residential property remains a popular asset class for Africa’s affluent investor, especially luxury apartments, residential estates and beachfront villas.
“According to the report, South Africa’s cities dominate the list of the most expensive cities for prime residential property in Africa, starting with Cape Town (Bantry Bay and Clifton), followed by Durban (Umhlanga) and Joburg (Central Sandton).”