Foreigners eye luxury homes
Rand’s current trading position sees SA real estate a bargain to those paying in euros, dollars
THE WESTERN Cape’s luxury property market is set to see more foreign buyers as the rand continues to slide against other major currencies, say real estate experts. The rand is currently trading at over R20 against the pound and almost R13 to the dollar, which may lead to a shortage of upperend property as demand increases, especially sought-after locations around the province.
Mike Greeff, the chief executive of Greeff Properties, said buyers with foreign currencies were perfectly poised to snap up luxury homes on the Cape Peninsula and the coming season was likely to herald a flurry of interest.
He said fellow affiliates in the Christie’s International Real Estate network had been in contact with buyers interested in luxury Cape-based homes.
“There is particular interest for homes bordering on vineyards and those with ocean views.”
Greeff said with the rand’s current trading position, South African real estate was a bargain for foreign currency holders and a R10 million luxury property was now available at £478 469 or $775 795.
“This is value that is almost impossible to beat for the quality and beauty of real estate in South Africa, and in particular, what the Western Cape offers.
“While the sale of huge ticket homes along the Atlantic Seaboard tends to make the headlines, there is always a lot of interest along the False Bay and Southern Peninsula coastline, where prices are comparatively lower and space is more generous.”
Greeff added that many of the foreigners buying in South Africa were those who tended to travel extensively.
There was also interest from former South Africans currently living overseas who wished to keep a foothold in the country.
Recent sales by Greeff included a R42m Bishopscourt property sold to a South African living in Singapore while an agent sold a R4.6m Noordhoek home to a former South African.
“The Atlantic Seaboard comes in first with an average of 16.6 percent of all property sales being attributed to foreign buyers since the start of 2015.”
Samuel Seeff, the chairman on Seeff Properties, said there can be little doubt that the weak rand would be a boost for the Cape property market. “Not only for foreign buyers, especially those buying in pound sterling, but also in other major currencies such as the euro and dollar, who will see property, especially on the Atlantic Seaboard as offering excellent value.
“The Cape property market has been a strong performer over the past few years with the R20m-plus trophy sector of the market especially surging ahead in price and value as wealthy buyers, including South African buyers and expats, see the Cape as a good store of wealth.”
Seeff said sales in the over R20m trophy sector across the Cape metro already topped R1 billion for this year and included a number of high value sales ranging to R100m for a luxury Clifton villa recently sold to a Joburg buyer while apartments in the city had sold for up to R33m, in Bantry Bay.
“The Cape remains a solid bet for buyers with good capital growth across the many areas over the last two years.”
Laurie Wener, managing director at Pam Golding Properties Western Cape metro region, said the weakened rand made property in South Africa cheaper, which in turn would have the effect of seeing overseas buyers regard the country as a good destination to spend part of the year and even retire to.
She said this was because it was not only about the cost of acquiring property but also the cost of living.
“This aspect is encouraging as we would anticipate it will bring an influx of people to South Africa. Cape Town is attractive to global buyers as an aesthetically beautiful place with an understated cosmopolitan lifestyle and with a low cost of living for those with international currencies.”
Regarding what impact the slightly higher interest rate has on sales, Wener said it may impact on the affordability sector of the market.
“Generally, we don’t anticipate a significant impact on the market in the Western Cape metro region, where we experience a significant number of buyers with a high cash to loan ratio. Another positive factor is that property investment is always regarded as a hedge against increasing inflation.”