Cape Town property pulls foreigners

12 June 2013

Foreign buying activity in Cape Town’s most sought-after suburbs has picked up markedly since the start of the year, predominantly on the back of the weak rand, according to property agency Seeff.

Since January, about 75 properties to the value of almost R566-million have been snapped up by foreign buyers, the equivalent of more than 80 percent of the 89 units to the value of around R570-million that sold during the whole of 2012, Seeff’s managing director for the areas, Ian Slot, said this seek.

This includes nine sales above the R20-million mark – four of which were bought by African buyers. The shift in activity to African buyers and emerging Eastern markets such as China and India is also becoming more prevalent, Slot said.

African buyer activity has already more than doubled, with 12 property sales to the value of just over R142-million compared to about six property sales for the whole of 2012.

Nigerian buyers top the list, with four properties that includes an apartment at Cape Town’s V&A Waterfront for R25-million and a luxury home in Bantry Bay for R30-million.  An Angolan buyer also paid R30-million for a home in Camps Bay.

Buyer activity from the emerging Eastern markets such as China and India has also more than doubled for this year so far, said Slot. A total of 10 properties to the value of just over R61-million have sold to Eastern buyers compared to only four sales during 2012.

Chinese buyers top the list, with six property sales compared to only two during the whole of last year, he added. Five of these sales were below the R5-million price band, while the sale of a Camps Bay mansion topped this at a selling price of R7.296-million. Two Middle Eastern buyers also invested in Camps Bay holiday homes, including a modern villa sold for R9.75-million.

European buyers account for 28 property sales to the value of just under R155-million; about 40 percent of all buying activity.

About 18 properties to the value of R63-million were sold to British buyers.

Buying activity from the USA remains low at only three property sales compared to two sales during 2012.

The majority of sales, 52 properties (69 percent) worth more than R470-million, took place in the suburbs of the Atlantic Seaboard. This includes 11 sales to African buyers.

The highest activity was in Camps Bay with 16 sales, followed by Sea Point with 11 sales. Sales in Cape Town’s central business district and City Bowl suburbs account for 23 units (31 percent), mostly to British and European buyers, Slot added.

While foreign buying activity had improved over the last few months, Slot said that overall volumes were still down since 2009, when 435 properties with a combined value of over R1.5-billion sold to foreign buyers.

This positive foreign buyer sentiment in the lead-up to the 2010 Fifa World Cup had since been stifled by the continued uncertainty in the UK and European economies. The upside of this was that many UK and European buyers had looked to shift their funds into South African property, and the weak rand had served as a significant incentive. This made property here even more attractive as a safe haven, he added.

While foreign buyer activity for this year accounted for about 13 percent of the total sales volumes (81 out of a total of 608 units sold), Slot said that this percentage was always moderated by sales of foreign owned properties. For the 2012 year, for example, about 89 out of the total of 1193 properties sold were to foreign buyers, representing eight percent of all unit sales on the Atlantic Seaboard and in the City Bowl. In contrast, 117 foreign-owned properties were sold during the same year.

Sapa