9/10 richest SA suburbs now in Cape Town

Cape Town - Cape Town is home to nine of the ten richest suburbs in South Africa, Samuel Seeff, chair of the Seeff Property Group told Fin24 on Monday.

In his view, prices have "comfortably" reached R100m to R200m-plus levels on the Atlantic Seaboard, for instance, while top end luxury properties and locations can now range from R185m to R300m.

"Buyers and property investors - not just at the top end of the market, but across the board - want to know that they are investing in areas where service delivery and zero tolerance for corruption are hallmarks. They want to know that their investment is not just safe, but that it will grow in value," he explained.

"What you get in Cape Town is the fabulous location and lifestyle, underpinned by confidence and a more solid foundation, service delivery and intolerance for corruption. There is just not the same level of confidence in Gauteng."

Clifton tops the top 10 list with an average selling price of R23m, followed by Llandudno (R17m) and Bantry Bay (R16.9m). The only Johannesburg/Sandton suburb among Seeff's top ten richest suburbs in SA list - Sandhurst - ranks in 4th place with an average selling price of R16.5m.

This is two places lower since late 2015, while Westcliff and Dunkeld have since then dropped off the top ten list.

Camps Bay (R16.2m) comes in at 5th place, followed by Fresnaye (R16m), the Waterfront (R16m), Higgovale (R16m), Bishopscourt (R15.1m) and Constantia Upper (R11.6m).

The Atlantic Seaboard's average selling prices for full title properties have more than doubled over the last five years, according to Lance Cohen, Seeff’s luxury market specialist for the Atlantic Seaboard. The biggest gains have been in Fresnaye (+167%) and Camps Bay (+128%). Camps Bay has attracted the highest number of R20m-plus sales over the period.
Where only Clifton topped the R15m average price mark, there are now seven Cape suburbs above this range, while Clifton now tops R20m for full title property, according to Cohen.


R1.1bn in revenue

The last 44 transactions above R20m in Cape Town generated over R1.1bn in revenue, for instance. Of these buyers 30% were from Johannesburg and a few from KwaZulu Natal. Seeff pointed out that less than 10% were sales to foreigners - mostly from the UK and Germany.

Two years ago the Mother City was home to seven of the top ten richest suburbs in the country, according to the study done by Seeff, based on data from Lightstone and Propstats for the period from February 2011 to July 2016.

Seeff pointed out that, despite the current economic situation in SA, properties in the Cape are still fetching excellent prices.

For example, Seeff has concluded transactions on the Atlantic Seaboard to the value of R54m for three sales; R27m in Camps Bay; a single sale of R82m in Fresnaye; a record sale of R32m in Hout Bay and R34m in Higgovale in the City Bowl.

Seeff told Fin24 that the greatest factor is the ultra-high net worth individuals investing in Cape Town, because it will show growth in capital and real returns.

"We really need to turn confidence in Gauteng around, especially in the higher income bracket as they are the buyers with discretionary money. Cape Town's upper end can sustain such prices as property is constrained by the sea and the mountain. So, if you want to be in those areas you must pay for position," said Seeff.

"On top of that, while these properties are expensive in Cape Town, internationally we still offer very good value so I foresee still a lot of growth possible in prices."


Water crisis

In response to a question by Fin24 regarding the impact of the water crisis in Cape Town, he said it creates a great deal of concern, but that it should be turned around by means of solutions like desalination - or good rainfall.

Going green with new build is in any event an important factor for buyers, he added.

In his view, the Atlantic Seaboard will continue to grow in price as it has over the past three decades. The Waterfront is also expected to do well and the City Bowl has become a good performer.

"With the influx of semigrations from Gauteng, the schools node in Rondebosch and Newlands should do well as well as Bishop's Court and Constantia for those looking for larger 'Gauteng type' properties," he said.
According to Seeff, the decline in the rankings of the top end Johannesburg and Sandton suburbs become even more pronounced in the R20m-plus super luxury sector.
"High net worth buyers are just not investing at the same levels in Sandton and even less in Pretoria East and the palatial homes there are still struggling to achieve the pace of sales and prices that the Atlantic Seaboard and Cape Town City Bowl are achieving," said Seeff.


Lightstone data shows that for the Johannesburg/Sandton area, an average of six to seven residential transactions priced above R20m were recorded annually between 2010 and 2015.

This increased to ten transactions over the last year. Only three such Pretoria East residential transactions appear to have taken place since 2010. In Pretoria East there was has only one sale of R45m (in Waterkloof in 2014) and one of R66m in Sandton (Empire Place in Sandhurst in 2016).
Comparatively, 20 to 50 such transactions were recorded for the Cape in the 2010 to 2014 period, increasing to 67 last year.
Seeff said he would have expected Johannesburg/Sandton to achieve more sales and much higher prices, considering Sandton’s status as the wealth capital of Africa.

"The wealth there is enormous, while Pretoria East is home to the premier government and ambassadorial belt," explained Seeff.

Land sizes are generally smaller in the Cape as are the houses, especially on the Atlantic Seaboard. There are exceptions in Bishopscourt and Constantia.

Yet in Atholl (Sandton), you can get an 818m² house with extras such as a wine cellar, outdoor entertainment area, staff accommodation, multi-car garaging and a swimming pool for R10.9m.

A similar house on the Atlantic Seaboard - Camps Bay for example - will cost R18m to R32m and in Bantry Bay as much as R30m to R40m.

In Sandhurst (Sandton), a palatial French-chateau styled house with spectacular interiors and bespoke finishes and parklike grounds, is priced at around R48m.

A comparative property in the Atlantic Seaboard suburbs of Clifton, Bantry Bay and Fresnaye will cost around R75m to R185m, says Cohen.

In the exclusive Mooikloof Equestrian Estate (Pretoria East), a palatial 2 291m² home, set on land of 10 000m², is priced at R26m, while a similar property in Cape Town's top southern suburbs of Bishopscourt and Constantia has sold for R66m.

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