Weekend Argus (Saturday Edition)
Luxury market is regaining its shine
THE luxury property market faced some challenges in 2018, but Cape Town remains one of the cities still attracting international investors looking for luxury real estate.
This is backed up by the Wealth-X Global Property Handbook which shows that Cape Town ranks 37th, or one below Dubai at 36th, says Denise Dogon, chief executive of Dogon Group Properties.
“We believe in 2019 the Atlantic Seaboard and City Bowl areas are going to offer the property investor interesting opportunities which will be hard to pass up. With the sluggish rand, and pressure in the local market, luxury properties will also seem increasingly attractive to overseas investors in terms of the discounts to be had from serious sellers.”
The Camps Bay/Bakoven area is one of the most desirable addresses in Cape Town, says Devin de Moyland, area specialist for Chas Everitt Luxury Portfolio, and since July last year, there has been an increase in property sales in these exclusive Atlantic seaboard suburbs.
“Earlier in the year, buyers were hesitant due to extreme water restrictions in Cape Town and uncertainty over the government’s land expropriation plans. But then we had good winter rains, the land fears subsided, and things began to turn around for property sellers here.
“We saw astute investors starting to move in and buy up properties, including some that had been on the market for many months, in anticipation of a rise in prices as the supply of homes for sale dwindled and the annual seasonal influx of international buyers gained momentum.”
De Moyland says the number of sales in Camps Bay and Bakoven is “never very high” as there are only about 2 400 freehold and sectional title homes there in total, and minimal space for new development.
Existing owners also tend to sell reluctantly.
Local renters may also be able to experience luxury living in the current economic climate, say Seeff agents Vivien Adler and Barbra-Ann Briner.
With the pressure on the property market in the Cape and many new developments, the rental rates in the luxury sector of the Atlantic Seaboard are down by about 25% and there is currently a surplus of stock on the market.
There has never been a better time to rent here. Rental rates currently average at around R20 000 to R40 000 a month for a two-bedroomed apartment in new developments while houses and villas are in the R50 000 to R120 000 a month range depending on the location, size and quality.
Adler says the convenience and “fabulous lifestyle” of the Atlantic Seaboard is a big attraction and there is usually high demand for rental accommodation. Furthermore, many people holding back on buying right now may choose to rent.