TROPHY homes are back in vogue with estate agents reporting a strong increase in property sales in wealthy suburbs where price tags typically exceed R10m. Lew Geffen, chairman of Sotheby’s International Realty in South Africa, on Tuesday described the top end of the market in Cape Town and Johannesburg as being "on fire". Neither the upcoming election nor the prospect of further interest rate increases had done anything to slow demand for luxury housing. "In March alone we sold R120m worth of property on Cape Town’s Atlantic Seaboard, including a V&A Waterfront property for R38m," Mr Geffen said.
"In Johannesburg we have sold more than R150m worth of upper-end properties in the past three months, including two Sandhurst clusters for R28.5m each, a Sandhurst house for R21m and a vacant stand in Sandhurst." Increased demand for trophy properties is being driven by high net worth buyers realising that time was running out if they wanted to upgrade to more luxurious homes at a "discount". Mr Geffen said upper-end buyers kept track of market trends and therefore were aware of growing stock shortages in sought-after suburbs, which were starting to push prices higher. Other estate agents are reporting a similar trend. Pam Golding Properties CE Andrew Golding said the group saw a 51.6% and 47% increase in sales turnover in the price band R10m-R20m and R20m-plus respectively for the 12 months ended February.
That compared to a 21% rise in the group’s overall turnover for the same period. "High profile, upper-end areas such as the Atlantic Seaboard, Cape Town’s southern suburbs and Sandton is the busiest that it has been in five years,’’ said Seeff chairman Samuel Seeff. Seeff has sold about R500m worth of residential properties on the Atlantic Seaboard over the past four months. Recent record sales include a luxury villa in Clifton Road for R55.86m and an apartment in Cliffrock (also in Clifton) for R29m. Mr Seeff said the recent increase in demand in swanky areas had already resulted in the narrowing of the gap between asking and selling prices. In Camps Bay, for instance, the average difference between asking and selling price had come down from about 20%-30% two years ago to within 10%. "The increased pace at which properties are selling in upper-income areas is underscored by the fact that the group concluded 10 sales in Camps Bay in the last month compared to two to four sales per month two years ago," Mr Seeff said.
The Rawson Property Group last week reported a revival of sales in leafy Constantia and Bishopscourt in Cape Town’s southern suburbs, with the group clinching a record R22m sale in Constantia. "Until recently, there has been little interest for properties priced above R10m in Constantia," said Gerald Romanovsky of the group’s Constantia franchise. "The change became evident soon after the start of this year when we suddenly found ourselves in a new ballpark, handling five or six genuine enquiries per month for this type of luxury property from both local and foreign buyers ." Industry players say the return of foreign property buyers to South Africa’s shores has supported the uptick in demand for trophy homes.
This article first appeared on Business Day: http://bit.ly/1i818fj