Foreign buyers eyeing Cape Town Atlantic Seaboard again this summer
Category Expert Insight
A pickup in domestic and international tourism over the summer season should lift demand from foreign and holiday home buyers according to Ross Levin, managing director for Seeff Atlantic Seaboard and City Bow.
Mid-year news reports quoting Cape Town Tourism chief executive, Enver Duminy states that arrivals are up and the city expects a good tourist season. A welcome return of holiday makers from abroad will no doubt bring increased demand from foreign buyers who are spoilt for choice in the Cape this year, he says.
Enquiries usually pick up from around this time of year with sales tending to peak in the December to April period. For the first time in years, there is more stock across the Atlantic Seaboard and City Bowl while prices have remained flat and the currency conversion rate remains favourable for foreign buyers.
You can for example find luxury sea view properties in the best location in the country from EUR 1,1m for a luxury Camps Bay townhouse or fabulous villa in Fresnaye. A superior penthouse overlooking the ocean in Bakoven is just EUR 1,5m (R25m) and an apartment in one of the best complexes in Bantry Bay with a private splash pool and direct beach access is just EUR 2,1m (R33,95m). A rare bungalow with access to Clifton's 1st and 2nd beaches is available for EUR 2,3m (R37,5m) and one of the best apartments in the country overlooking the Front Yacht Basin at the Waterfront for EUR 3,1m (R49,9m).
Propstats data of foreign buyer activity across the Atlantic Seaboard and City Bowl for the six-year period from 2013-2018 and 2019 to end of August reveals that the city remains a top choice, attracting buyers from over 40 countries and every continent, he says.
Over this period some 917 properties worth a combined R6,83bn was purchased by foreign buyers representing 18% of the value of all sales for the Atlantic Seaboard and 9,5% for the City Bowl. Volumes peaked in 2014-2016 with the highest concluded in 2014 (206 units at R1,2bn) and the highest percentage of 19,76% in 2016 (180 sales at R1,56bn).
Foreign buyers spent more on a per capita basis which is a notable injection for the local economy and fiscus (given the higher property taxes generated). Mr Levin says further that aside from the initial property taxes, fees and commission, foreign buyers often spend further on renovating and furnishing the properties, injecting further economic benefits.
Suburbs with the highest number of foreign buyers
The highest volume of sales was in the Cape Town CBD (147 units) and Sea Point (133 units), both high density apartment areas offering accessible pricing in the R1,8m to R3,8m range and attractive Airbnb and rental investment prospects, says Mr Levin. In the high-end suburbs, Camps Bay tops the list with 124 units followed by the Waterfront (46), Bantry Bay (41), Clifton (31) and Fresnaye (30).
Foreign buyers spent 46% more with an average transaction value of R7 452 563 compared to R5 119 061 for the areas as a whole over the 6-year period. The value spent is also 36% up since 2014 (when it was R5 825 243) reflecting the growth of Cape Town as a global leisure and property destination, says Mr Levin.
Highest prices achieved on the Atlantic Seaboard (based on the most recent)
Clifton - R80m (Beaches apartment, UK buyer, 2017) and R73m (Eventide apartment, Nigerian, 2016);
Bantry Bay - R290m (Ocean View Drive home with adjacent plot, German buyer, 2016) and R27m (house in Kloof Road, Batswana, 2019);
Fresnaye - R60m (house in De Wet Road, German buyer, 2019) and R29,375m (house in Ocean View Drive, Swiss, 2015);
Camps Bay - R37m (house in Theresa Road, German buyer, 2016) and R36m (house in Atholl Road, French, 2019);
Waterfront - R32m (Parama apartment, Australian, 2014) and R23,94m (Palgrave apartment, UK buyer, 2014).
European buyers remain the largest demographic at 65% with UK buyers topping the list at 22,6%, followed by German (16,5%) and Netherlands and France at 5,9% respectively. US comprise 8,2%.
Emerging trends include a recent decline in UK buyers while German buyers have increased. Buyers from other African countries have also declined drastically to 7% in 2018 and less than 1% in 2019 compared to 19% in 2015. More buyers from the Middle East (such as the UAE) and Asia (such as Chinese) are now investing in property.
Mr Levin says that the positive elections outcome, dissipation of the water crisis, improvements in the visa regulations and direct US flights should boost visitors and property demand from foreign buyers. Cape Town continues to trend in the top 20 global cities for capital value growth (measured during the 5-10 year growth period to 2017/8) and offers a superb lifestyle and value proposition as good as anything that you will find in Southern Europe.
Photographs enclosed - Hot property for foreign buyers:
Prop 1 - Waterfront R49,9m (EUR 3,1m) - 400sqm luxury apartment in Pinmore overlooking the Front Yacht Basin with 3 beds, a study, secure parking and more
Prop2 - Clifton, R37,5m (EUR 2,3m) - rare beach bungalow with access to Clifton's 1st and 2nd beaches, incredible ocean views, two bedroom suites, Jacuzzi and entertainment terrace and pool
Prop3 - Bantry Bay R33,95m (EUR 2,1m) - luxury 3-bed apartment with private deck and splash pool in The Bantry, one of the most exclusive complexes overlooking the Atlantic Ocean
Prop4 - Camps Bay R25m (EUR 1,5m) - luxury 3-bed penthouse with unobstructed sea and mountain views, opulent finishes, 3-car direct entry garage and extra parking, private rooftop deck and pool, staff accommodation and wine storage and tasting room
Prop5 - Fresnaye, R16,95m (EUR 1,1m) - excellent price in this top neighbourhood, spectacular views, 3-beds, modern interiors, swimming pool and more
Prop6 - Camps Bay R16,95m (EUR 1,1m) - luxury double-story 4-bed townhouse in sought-after Strathmore Road with fabulous views and modern interiors
Author: Gina Meintjes