Foreign buyers snap up R40m-plus Cape properties despite weak luxury market, says Seeff

The Seeff Property Group achieved a record R1,75 billion in sales for March, the highest in the group’s 57-year history, and concludes a great first quarter for the property market, says Samuel Seeff, chairman of the group.

This comes as the group reports increased activity from foreign buyers at the high-end price levels with Seeff clinching a R45m sale of a penthouse to a German buyer at the Waterfront, the highest price achieved here in close to eight years.

Seeff is also in the process of concluding an even higher value sale in Plettenberg Bay to a buyer from the UK which will be one of the highest prices ever achieved for residential property in the town. This follows a recent R36 million sale to a UAE buyer in Fresnaye, several sales in Camps Bay, and two R20 million-plus sales in Constantia Upper to buyers from Zimbabwe and Malawi, respectively.

Overall sales to foreign buyers across Cape Town’s Atlantic Seaboard and City Bowl are a whopping 36% higher compared to 2019 and is the highest in the past three years. Almost one third of all high value sales have been to foreign buyers who have paid some of the highest prices including the R45 million sale at the Waterfront.

Seeff says that while the luxury areas are doing exceptionally well in the price bands to around R5 million to R8 million (R18 million on the Atlantic Seaboard), sales in the R20 million-plus sector remains well below what it was in 2017. That said, sales are taking place across the board in the high-end areas from Zimbali to Plettenberg Bay and Cape as well as in certain Gauteng locations.

Generally, the market remains driven by the low interest rate with the highest volume of activity still below R3 million as first-time buyers continue taking advantage, but we are also seeing buyers upgrading, or investing or relocating to a “Zoom Town” for a better quality of life.

In the high-demand urban areas, buyers need to remain mindful that there are no “bargains” to be had as the market remains well balanced in terms of supply and demand, although some areas are seeing stock shortages, but predominantly in the lower price bands.

At the top end of the market, the picture is a little different, he adds. Here, buyers can find great value given that prices of properties, often not seen before, are now at about 20%-30% lower compared to 2017. Nothing has for example sold above R80 million on the Atlantic Seaboard over the last three years, well short of the R100 million to R290 million achieved prior to 2017.

If you combine the value with what you can buy in SA in dollar, pound and euro terms, the value proposition is significant, not just for foreign buyers, but a lost opportunity for SA’s wealthy buyers. Astute buyers are using the opportunity to pick up great value, albeit few and far between, he adds.

Seeff says the market remains active and given that the interest rate is expected to remain at the low end for most of this year, the primary residential market is expected to continue surprising on the upside. Well-priced properties can sell within days depending on area and price band.

Photograph enclosed:

Waterfront, Juliette penthouse sold for R45 million to a buyer from Germany. The magnificent penthouse is located on the canals with 360-degree mountain and sea views. It comes with a double volume living area, three bedrooms and a stunning deck and private pool. It was sold by Seeff agents, Finella Botes and Kim Bailey