Wealthy buyers retreat
House prices in Sandton surpass those on the Atlantic seaboard as luxury sales in the Mother City dry up
ý The highest price achieved for a residential property in Cape Town for the year to date is believed to be “only” R26m. That’s what a swanky V&A Waterfront penthouse with a wraparound terrace and private pool recently sold for.
But it’s a snip of the R50m-plus well-heeled buyers were regularly forking out a year or two ago for a Waterfront pad, arguably one of the Mother City’s most prestigious residential addresses.
It’s also significantly below the record R85m a foreign buyer paid late last year for a “modernist villa” in Higgovale, and nowhere near the R90m-plus estate agents were achieving for über-luxury properties on the Atlantic seaboard between 2015 and 2018. In fact, sales above R20m have seemingly all but dried up in Cape Town.
Dogon Group Properties, the Atlantic seaboard-based company that sold a palatial seven-bedroom house in Bantry Bay for a staggering R290m to a German couple in 2016 (the highest price ever paid for a residential property in SA), has only clinched two sales in the double-digit bracket this year — for R11.8m and R15.5m.
Dogon MD Alexa Horne says that high net worth buyers are no longer prepared to commit unless they are getting a bargain. Top-end sellers on the Atlantic seaboard who want to secure a deal have to be prepared to accept offers of up to 50% below asking price. Last month a two-bedroom bungalow with direct access to Clifton’s
Third Beach sold for R17.8m via an online bidding process hosted by High Street Auctions. Before the auction, the same property was on the market for over a year at a listing price of R37.5m.
High Street Auctions director Joff van Reenen says the luxury market has seen a substantial correction, but many sellers are still holding out for unrealistic prices.
“It can take 12 to 18 months these days to sell a big-ticket property,” he says.
“There is still a fairly large gap between most sellers’ price expectations and current market levels.
The sooner sellers realise this, the sooner they’ll begin to realise true market value for their assets.”
Seeff Property Group chair Samuel Seeff confirms high-end transactions in Cape Town’s swish suburbs have dwindled. There have only been four sales above R20m on the Atlantic seaboard and City Bowl so far this year.
That compares to about five R20m-plus sales a month during 2016 and 2017. Seeff attributes this to the fact that wealthy buyers are heavily influenced by sentiment, which is at a record low.
However, it seems Joburg’s northern suburbs are holding up. “We have seen an exciting pick-up in the Sandton area, with several recent offers in the R10mr12m range. We have also concluded some high-value sales in Eagle Canyon Golf Estate on the West Rand,” says Seeff.
Pam Golding Property Group is reporting a similar trend. The company recently sold a Sandton mansion for R45m — the highest sale price achieved across SA by the group year to date.