Falling rand brings rising sales for luxury market

AS the rand weakens against the dollar, international investors are looking at South Africa’s luxury sector to get value for their money, and wealthy local buyers are shopping for “trophy properties” and private jets and placing their bets at art auctions.

Prime coastal destinations such as Knysna and Plettenberg Bay are a big attraction, according to Pam Golding Properties area manager Ling Dobson, who said there had been growing interest in top-end homes priced from R10-million upwards. In some cases buyers are willing to pay more than R20-million.

“When you consider the current rand values versus the dollar, euro and pound, investing on the Garden Route is incredible value for money — particularly when you compare Knysna and Plettenberg’s luxury homes with other coastal areas such as the Cape Atlantic Seaboard,” said Dobson.

Describing the Atlantic Seaboard as the “Côte d’Azur of Southern Africa”, Dobson said the fall of the rand had, on the positive side, contributed to increased property investment in the area.

“This year we have sold many homes in the R4-million to R11-million price bracket, while a further positive factor is the increased appetite for vacant land.”

Basil Moraitis, Pam Golding’s area manager for the Atlantic Seaboard and Cape Town City Bowl, said trophy properties’ sales value “is often not a consideration — as these buyers value convenience and are prepared to pay these costs”.

Said Dobson: “In the past month alone, we have had half a dozen requests for luxury homes ranging between R20million and R60-million.”

Demand in the luxury segment was reminiscent of the boom years before the global financial meltdown, she said.

RIDE AND SHINE: The Aga Khan’s 1958 Mercedes-Benz 300d sold for R1.87-million

Travelling in comfort is also a priority for the well-heeled.

Lyndee du Toit, MD of Air Charter Services South Africa, said doing business in dollars had helped to curb the effects of the rand’s decline.

“The fall of the rand makes it easier for international clients to charter from South Africa as it is cheaper with the dollar, euro, pound giving them greater value,” she said.

Chartering a VVIP jet or a helicopter can set you back anything from R5 500 per hour to millions of rands, depending on the aircraft you pick.

“Aircraft are like cars — luxury vehicles cost much more than your entry-level vehicles,” said Du Toit.

“Your cost will depend on the distance you travel and the length of time you keep the vehicle.”

Du Toit said most of their clients flew to countries with a strong oil, gas or mining industry.

“Flying on a private jet can be seen as a status symbol — however, it can be very beneficial for travel to destinations that are not easily accessible or have limited commercial flights.”

Luxury items pre-owned by the rich and famous are also being bought as investments at auctions.

A 1958 Mercedes-Benz 300d Series Adenauer used by the Aga Khan IV and his family when they toured Africa sold for R1.87-million at a Stephan Welz & Co auction in August this year.

Anton Welz, a director at Stephan Welz & Co, said such auctions catered for the 853 or so “ultra-rich” South Africans, who snap up items such as Stanley Pinker’s oil painting Fête Champêtre, which sold for R1.95million in May this year.

The auction house had not been affected by the falling rand, “as the things we sell are essentially ‘second-hand’,” said Welz.

Art and jewellery were top sellers, with Irma Stern’s painting Young Arab being sold for R9.8-million in August 2011.

“Most serious collectors of art come from the business sector. While there are some retired collectors, we are also seeing a new breed of younger collectors, also largely from banking and other financial industries,” said Welz.

There has been growing interest in homes priced from R10m up