BACK ON THE MAP
Recent big-ticket property sales — and increased interest — suggest SA property is back on the radar of foreign buyers
Six months ago, as SA sank into recession and yet another round of load-shedding kicked in, estate agents were lamenting how property sales in the R20m-plus bracket had all but dried up. Then SA went into lockdown and well-heeled buyers — foreigners in particular — seemingly bolted out of SA’S real estate market for good.
But estate agents have seen an unexpected uptick in foreign interest in recent weeks, with a number of sales concluded “site unseen” — buying a house without a physical viewing.
For instance, Pam Golding Properties (PGP) last month sold two plush properties on Cape Town’s Atlantic seaboard for R41m and R30m, both to US buyers. The one is a lavish penthouse at the V&A Waterfront’s Marina Residential Estate, the other a three-bedroom seafront apartment in Clifton.
It seems the acquisitions were driven by the weaker rand and softer house prices, which have increased SA’S relative value proposition.
As PGP group CEO Andrew Golding puts it: “Both buyers are familiar with the highly desirable lifestyle offering on the Atlantic seaboard. And a comparable seaside purchase in most European and North American states would cost multiples of that in Cape Town.”
The Clifton buyer is a swallow who lives in Boston and intends using the apartment as a summer escape, while the new owner of the V&A Waterfront penthouse has apparently been looking for a Cape Town base for several years.
Golding says though foreign buyers in the past have come mostly from the UK, the rest of Africa, Germany, the Netherlands, France and Belgium, this is the first time the group is seeing keen interest from US investors.
Others are reporting a similar trend. A buyer from Texas recently snapped up a fully furnished, three-bedroom bush lodge in Limpopo’s Mabula Private Game Reserve for R2.5m in an online auction hosted by High Street Auction Co.
Though the sale was also concluded site unseen, the buyer has previously visited game farms on hunting and fishing trips to SA, says High Street Auction Co director Joff van Reenen.
He adds: “We are suddenly seeing a rush of international interest in leisure properties in rural areas and coastal villages, many of which we couldn’t give away six months ago.”
Van Reenen ascribes this to a combination of value for money and the remote-working trend, which he believes will support global mobility once international travel restrictions are lifted.
Lew Geffen Sotheby’s International Realty closed nearly 20 sales with foreigners between March and August, the majority of them for properties in the Western Cape, one in the popular Eastern Cape coastal enclave of St Francis Bay and two in Pretoria.
During lockdown, Chris Cilliers, CEO of the company’s branch in the Cape winelands, sold a Somerset West home to a US buyer for R10m and a house at exclusive golf estate Pearl Valley to a Dutch buyer for R5.8m, among others.
Seeff property group has concluded five
Atlantic seaboard sales to foreigners, all of them in Camps Bay. They ranged in price from R5.2m (an apartment bought by a German for holiday and short-term rental use) to R18m (a bungalow sold to a Russian who is a frequent leisure traveller to SA).
Apart from sales to foreign leisure buyers, Seeff Atlantic seaboard & city bowl MD Ross Levin says there’s also been increased interest among South Africans living abroad, who can now buy property in SA at a discount using their hard currency earnings.
Knight Frank’s latest prime international residential index confirms that wealthy buyers in Cape Town are still getting considerably more bang for their buck than in most other parts of the world.
According to the index, $1m will buy you a 174.3m² abode in an affluent Cape Town suburb — nearly double the floor space you would get in Melbourne (95.6m²), and more than three times what you would get in Sydney (50.4m²) or Paris (44.6m²).
Cape Town buyers are forking out only about one-tenth of what they would pay for a property of equivalent quality and size in Monaco, the world’s priciest property spot, where $1m buys a mere 16.4m².
Latest FNB data shows that foreign buying as a percentage of overall housing sales in SA stood at 5% in the second quarter, up from 3% a year earlier, but still below the most recent peak of 7% in the fourth quarter of 2014.
FNB senior economist Siphamandla Mkhwanazi expects foreign interest in SA property to be further fuelled by low global interest rates, a weak rand and lower prices, particularly in Cape Town and affluent coastal towns.
“The work-from-home drive could lend some support to foreign buying,” he says.