Ryan Greeff, CEO of Quay 1 International Realty, addresses the most commonly asked questions about the value of owning luxury coastal properties.
Q1: How popular are luxury properties around the coastal areas of SA, and which areas in particular are most popular or realise quick sales?
Luxury coastal properties in South Africa remain highly sought after, driven by lifestyle demand, holiday‑home buyers, and international interest, particularly in markets where supply is limited and views/beach access are premium. For example, prime segments in the Atlantic Seaboard have seen sharp price growth and strong competition.
Key areas that are outperforming and frequently achieving quick sales include:
Cape Town’s Atlantic Seaboard (including Clifton, Camps Bay, Bantry Bay, and the Waterfront), where luxury apartment and house stock is scarce and high‑net‑worth buyers are strongly active.
KwaZulu‑Natal North Coast, areas like uMhlanga and Ballito, where secure lifestyle estates, beach access, and international/investor buyers are driving demand.
Other rising coastal nodes are the Whale Coast (e.g., Hermanus) and Garden Route hotspots (e.g., Plettenberg Bay), where buyers seek alternative luxury homes outside of Cape Town’s intense competition.
Q2: What type of home do such buyers prefer, inclusive of features?
Luxury buyers in South Africa, both local and international, show strong preferences for free-standing homes and boutique apartments in prime locations, though secure estates are also popular for families seeking added privacy and lifestyle amenities.
Coastal views, privacy, and security are consistently top priorities, with many buyers willing to pay a premium for properties offering direct beach access or panoramic ocean and mountain vistas. Additional lifestyle features like modern gyms, pools, outdoor entertainment areas, and smart-home technology are increasingly influencing decisions, especially among younger or international buyers seeking turnkey luxury living. Overall, location, security, and unique views tend to outweigh the property type itself.
Q3: Are these purchases usually for a primary residence or for a holiday home or secondary residence?
For luxury coastal properties in South Africa, purchases are often a mix of primary and secondary residences. Many local buyers in Cape Town’s City Bowl and Atlantic Seaboard acquire these homes as primary residences, especially high net worth (HNW) professionals seeking lifestyle convenience and security.
At the same time, a significant portion, particularly among international buyers or locals from other provinces, are holiday or secondary homes, valued for short-term stays, investment potential, and lifestyle escapes. The trend is that properties with strong rental potential or turnkey luxury finishes often attract buyers open to both personal use and letting.
Q4: Is there good demand for luxury coastal rental properties, and, in peak season, are those renters generally local or international?
There is consistent and robust demand for luxury coastal rental properties in Cape Town. Supply at the very top end of the market remains limited, which drives strong absorption, particularly in the December to January peak season. During this period, demand is split between affluent local travellers (mostly from Johannesburg, with smaller representation from Pretoria, Bloemfontein, and Durban) and a significant international contingent. At the ultra-luxury level, international tenants dominate. Industry reports confirm that Cape Town’s international visitor arrivals and short-term rental performance now exceed pre-pandemic benchmarks, reinforcing what we see on the ground: premium coastal listings are consistently among the first to book out.
Q5: Do owners of luxury rental properties realise a good ROI through long- or short-term rentals?
While owners can earn substantial income from luxury coastal properties, short-term rentals, especially in peak season, are where the financial upside lies.
Long-term rentals generally don’t deliver high ROI relative to the capital value of these properties. True return depends on multiple factors, such as financing structure, equity-to-debt ratio, and whether you’re measuring cash-on-cash yield or long-term capital appreciation. In simple terms, short-term rentals generate the strongest returns, provided the property is managed professionally and priced correctly.
Q6: Are there more stringent due diligence regimes followed when reviewing renter applications for luxury properties, and if so, what are those?
There isn’t necessarily a more “stringent” process for luxury rentals; it’s that every application, regardless of value, demands uncompromising diligence. Agents must act like detectives, verifying income, employment, and identity through official documentation and social channels, while cross-checking references and transaction consistency.
Under South Africa’s Financial Intelligence Centre (FIC) Act (FICA), these are non-negotiable compliance steps for all rental transactions. The rise in sophisticated fraud cases underscores the importance of deep verification of both applicants and their referees across every segment of the market.
Q7: Do HNW individuals, renting a luxury property for the holiday season(s), expect add-on services?
At the ultra-luxury tier, where nightly rates can exceed R300,000, delivery of a seamless, fully serviced experience is expected. By contrast, monthly luxury rentals (often local professionals or remote executives) typically don’t require these add-ons, though full-service options can be arranged through the managing agency if requested. In short, Cape Town’s luxury coastal rental market remains one of the most dynamic in the country, characterised by a tight supply, strong peak-season demand, and exceptional performance in the short-term segment.
Takeaway
The key for investors is pairing a world-class product with world-class management.
