Foreigners are paying over
R20 million to knock down bungalows in Cape Town
Businesstech | 15 January 2023
The demand for residential property in Cape Town is still underway despite holidaymakers heading home, says Basil Moraitis, regional manager for Pam Golding Properties in the Western Cape.
“We’ve experienced a busy festive trading season on the Atlantic Seaboard with sales to the value of R200 million concluded during December (2022) alone, including high-end sales from R20 million upwards.”
“The lifestyle and natural scenic beauty of Cape Town, particularly the prime Atlantic Seaboard coastal strip between Table Mountain and the Atlantic Ocean, resonates with home buyers around the country and globally.”
Moraitis said that the post-pandemic market had been driven mainly by primary homebuyers and international buyers looking for a place in the sun during the Northern European winter.
The area is starting to see investors returning to the market and looking at hospitality products for Airbnb as stock levels reach their lowest point in a decade.
He said that high-end buyers of luxury homes in the price bracket north of R20 million are active in the area.
Given its prime location, world-class homes and exceptional lifestyle, the Atlantic Seaboard consistently attracts a high proportion of cash buyers – not surprising due to its appeal for a more well-resourced, affluent buyer demographic, added the regional manager.
The topography of many prime areas of the Atlantic Seaboard is located in a narrow bank of steep sites, increasing the value of the properties purely due to land scarcity.
“It, therefore, follows that the feasibility of developing and selling these properties depends on buyers with cash resources who choose to invest in unique luxury or trophy properties offering spectacular views and the lifestyle that goes with it.”
“This is why this segment has always drawn international and upcountry buyers with cash – and increasingly of late, German buyers.”
“Covid has turbo-charged this trend with people wanting to live their best lives now and in the place that makes them happiest.”
Moraitis added that international buyers see the value offered by the area’s properties as significant alongside offering a compelling lifestyle.
Pam Golding listed the following areas as those that have seen substantial interest:
- Camps Bay
- Clifton
- Green Point
- Cape Metro
- Constantia
Camps Bay properties have also seen an increase in interest, said the regional manager.
“The Clifton bungalows are again very much in demand by upcountry buyers looking for a specific and unique lifestyle offering.”
The entry-level price for a bungalow is currently R20 million for a knockdown. “We have recently sold two such bungalows on Fourth Beach, both of which are to be demolished for new state-of-the-art homes,” said Moraitis.
Beyond large stately homes, luxury apartments are also very much in demand, with convenience and centrality to the main city as a top selling point.
The region of Green Point is also very much in demand, with its convenient location close to the central city and main arterial routes in and out of the Atlantic Seaboard, making it a firm favourite for families and professionals.
In Green Point, the price points from around R2 million up to R20 million make it easier to get into this market, said Moraitis.
Holiday rentals in the Cape Metro have also soared, said Arno de Wit, Pam Golding Properties rentals manager for the area.
“We experienced a boom in holiday rentals over the festive season as local and international visitors returned in their thousands. We concluded several holiday lets over December with five of our most recent including:
- Seven-bedroom villa in Constantia let at R30,000 per night x 17 nights
- Four-bedroom house in Green Point let at R135,000 per month for a three-month lease period
- Four-bedroom villa in Camps Bay let at R25,000 per night x 10 nights
- Four-bedroom villa in Camps Bay let at R15,000 per night x 11 nights
- Three-bedroom house in Silvermist Estate in Hout Bay let at R8,000 per night for seven nights.”
Among long-term rentals, according to Pam Golding Properties, it recently let a five-bedroom home in Claremont Upper in Cape Town’s Southern Suburbs for R170 000 per month, while their highest asking rental currently available is R290,000 per month for a 10-bedroom home in Constantia