Cape Town's luxury property market is booming with the province containing the most expensive property and streets in the country.
Cape Town may not be the financial epicentre of South Africa but it continues to dominate the list of most exclusive addresses and data provided by Lightstone Property has revealed that the Mother City lays claim to three of the five most elite addresses in the country.
This is because luxury property in Cape Town is still in high demand by foreign buyers who dominate the top end of the market, and by South Africans wanting to live in a region with higher levels of basic service delivery, according to Lew Geffen Sotheby’s International Realty CEO Lew Geffen.
According to the Lightstone research, the most expensive street in South Africa currently is Nettleton Road in Clifton, where the median price for houses is R27.1 million, followed by Glen Beach Road in Camps Bay with an average house price of just under R24m. Head Road in Fresnaye takes fourth place with an average selling price of R21.44m.
Sandhurst in Johannesburg scoops third and fifth places with a median sale price of just under R25m in Coronation Road and R20.76m in Rivonia Road.
In the list of most expensive addresses in the Western Cape, not surprisingly, four of the five most pricey are situated on the sought-after Atlantic Seaboard, with fourth place taken by Eastcliff in Hermanus.
To determine the value of the streets, Lightstone uses a valuation model based on repeat sales and comparable sales which takes inflation indices and applies them to a property’s previous sale price to bring the historic purchase price to current value.
Geffen says: “The upswing on the Atlantic Seaboard started in 2002 when a property in Chilworth Road in Camps Bay sold for R23m, but the demand for luxury homes really began to peak 2008 when 13 properties in the R20m plus price band changed hands to the combined value of R414.193m.”
“In spite of the credit crunch which hit in 2008, property values on the Atlantic Seaboard have continued to grow exponentially and now it is not only home to the most trophy properties in South Africa; it also fetches the highest price per square metre.”
In 2008, Clifton was already enjoying the highest Rand value per street at R30.680m which was boosted by three outstanding sales; one in Kloof Road at R45m, another in Nettleton Road at R27.4m and on Third Beach Road a house sold for R26.8m.
According to Brendan Miller, Lew Geffen Sotheby’s International Realty Atlantic Seaboard CEO, the steady growth in both sales and prices peaked in 2014 when a the Deeds Office logged a record number of sales in the R20m-plus price band.
“Last year 28 luxury properties to the combined value of R819.3m changed hands, which was 98% higher than 2008 in terms of Rand value and 108% higher in terms of units sold with the highest prices being realised by two properties in Fresnaye; a house in Avenue Deauville which sold for R64.8m and another in De Wet Road at R56m.”
Miller says: “There has also been a notable upward shift in the market. The eight top prices achieved in 2008 were all in the R20m to R30m price band except one sale of R45m, but 2014 saw 18 sales in this price range as well as nine sales in excess of R30m, two of which were for more than R50m.”
“The trophy home market has been marginally slower this year, with only 12 sales to a combined value of R373.65m recorded at the Deeds office during the first eight months, however, the highest sale price realised was more than R100m in Nettleton Road,” says Miller. “The suburbs which have enjoyed the most sales in this exclusive price band to date are Bakoven, Bantry Bay, Camps Bay, Clifton and Fresnaye.”
Cape Town may be home to the most luxury properties in South Africa, although data from New World Wealth shows that Johannesburg still has the most Dollar millionaires in the country. However, an increasing number of wealthy Gauteng buyers are investing in property on the Atlantic Seaboard and commuting to Johannesburg, or and are buying second homes and properties for short term rentals which yield high returns, Geffen concludes.
The Atlantic Seaboard is home to the most expensive properties in South Africa. Watch the video below to take a tour of the area.