Even Stellenbosch beat out Johannesburg with 10 properties sold for over R20 million with a total value of R330 million.
- An analysis by Seeff Property Group shows that 241% more properties worth more than R10 million sold in Cape Town than in Johannesburg in 2022.
- Better service delivery and trust in local government are probably the main reasons, says Samuel Seeff, president of Seeff Property Group.
- While the total value of the seven sales above R20 million in Johannesburg was R193 million, Cape Town experienced a record number of sales above this category, namely 120 with a total value of 3.7 billion rand.
- For more financial news, Go to the News24 Business Cover.
Comparison of high-end residential property sales in Cape Town and Johannesburg indicates that the wealthy are “voting with their wallets” in favor of the Mother City, according to Samuel Seeff, chairman of Seeff Property Group.
In his opinion, better service delivery and trust in local government are probably the main reasons. Foreign buyers also favor Cape Town. For example, in 2022, about 30% of all sales along the Atlantic coast were to foreign buyers.
A Seeff analysis of deed office data provided by property analysis firm Lightstone shows that 241% more properties worth more than R10 million were sold in Cape Town than in Johannesburg in 2022.
Breaking down the categories further, 235% more properties were sold for more than R20 million in Cape Town, 145% more in the R10-20 million price band and 61% more in the band from 5 to 10 million rand.
While the total value of the seven sales above R20 million in Johannesburg was R193 million, Cape Town experienced a record number of sales above this category, namely 120 with a total value of 3.7 billion rand. International buyers accounted for about 30% of sales along the Atlantic coast.
Even Stellenbosch beat out Johannesburg with ten properties selling for over R20 million, with a total value of R330 million.
“There is a clear flight of real estate wealth to the Western Cape… while price ceilings have been stuck in the Johannesburg area,” says Seeff. “The rich are clearly ‘voting with their wallets’.”
However, he notes that even in Cape Town, such as Johannesburg, there has been “slow movement” in the price band above R10 million over the last ten years.
“Despite the record number of sales above R20 million in 2022 on the Cape Town metro, the upper price limits have remained more or less the same as five years ago,” he says. “Only a handful of sales exceeded R50m, and the top price has barely moved since around 2015.”
The highest price fetched in Johannesburg was R50 million for a property in Steyn City. The highest price reached at Sandhurst was R30 million. In Cape Town, by comparison, R125 million, R74 million and R72 million were raised for properties in Bantry Bay, on Cape Town’s Atlantic coast, and R100 million for a property in Constantia.
Ashleigh Müller, managing director of real estate agency Ask Ash, has noticed that because stocks move quickly in certain price ranges, some buyers submit signed offers and pay deposits without ever seeing the property in person.
Global provider of real estate services, Savills, has ranked Cape Town fifth in its Top-Tier Residential Index of World Cities, which analyzes factors such as prime capital value growth forecast to 2023 compared to of capital growth in 2022. Cape Town, with capital value growth of 5.1% in 2022, is projected to enjoy capital value growth of between 2% and 3.9% in 2023 .
Basil Moraitis, Western Cape regional head of Pam Golding Properties, which is Savills’ residential real estate partner in Africa, says that of the top 30 global cities cited in the Savills Index, Cape Town is the most affordable market. for prime residential properties with a capital value of just $260 per square foot.
