Wealthy buy­ers re­treat

House prices in Sand­ton sur­pass those on the At­lantic seaboard as lux­ury sales in the Mother City dry up

Financial Mail - - PATTERN RECOGNITIO­N - Joan Muller mullerj@fm.co.za

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.

Pic­ture sup­plied by Se­eff

V&A Wa­ter­front apart­ment: Cape Town’s high­est sale year to date fetched ‘only’ R26m.

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