Super-rich shell out millions for a home

There's a staggering price difference between the busy top end and slow bottom end of the market

The economy is slow, belts are tight and sales in mid-priced properties around South Africa have all but stalled in the past five years.

But no one gave this memo to the top end of the market, where the brisk trade in properties worth tens of millions has not skipped a beat.

The contrast between the top and bottom ends of the property market reflects the yawning economic divide in the country, with an increasingly squeezed bottom end a stark contrast to the recession-proof top.

The same disparity is evident in the fact that top-end retailer Woolworths is soaring with sales up 23%, yet low-cost supermarket chain Shoprite is growing by less than 10%.

Discovery Holdings CEO Adrian Gore, FirstRand founder GT Ferreira, heir to the skin-lightening fortune Mark Krok and the enigmatic Enthoven family: these are just some of the people trading houses in the mega-rich price bracket in South Africa's top-end leafy suburbs like Bishopscourt in Cape Town, Westcliff in Johannesburg and Ballito in KwaZulu-Natal.

But the real action is happening along the Atlantic seaboard, where no one has heard of a recession and few can pronounce it in English.

In March, 34 De Wet Road in Bantry Bay, Cape Town, was sold for R65-million to a West African businessman - records show it is registered to Monique Akani. The house is suitably impressive, positioned on the slopes of Lion's Head, with a view of the Atlantic Ocean.

It boasts a long pool terrace, two pavilions and a boma, and has its own ''beach", complete with a palm island.

This was the home of celebrity architect Stefan Antoni, who has since bought a shack down the road at 7 Nettleton Road for R20-million, which he apparently intends to raze and recreate. The houses on either side of his new abode are both Asian owned.

Last November, Mark Krok - son of Abe, who with his brother Solly made a fortune from skin-lightening creams and casinos - bought 7 Clifton Road for R37.5-million, a property that appears to have a splendid wooden bar overlooking the ocean. Discovery boss Gore bought a property on Clifton's 3rd beach from Primedia founder William Kirsh for R25-million, while GT Ferreira bought one on 4th beach for R35-million.

Westcliff in Johannesburg is much more low key than Clifton and Camps Bay - you're unlikely to find a Czech movie star walking her dog down these leafy avenues.

But it is home to Adrian Enthoven, son of Hollard MD Dick Enthoven and a director of the Sustainability Institute. He bought a R34-million house in Pallinghurst Road recently. Peter von Klemperer, Standard Bank mining and metals executive, in 2011 bought both parts of a subdivision in Westcliff for R13.5-million each.

The two most expensive streets on the continent are Coronation Road in Sandhurst, Johannesburg, and Nettleton Road in Camps Bay, Cape Town, according to Seeff agent Lance Cohen.

Several properties along Coronation Road have sold for more than R50-million recently, but Cohen said while the mega-deals were still taking place, prices had contracted in this area over the past four years.

They have continued to shoot up, however, along Cape Town's Atlantic seaboard, which has become something of an international destination.

"The suburb has become the summer playground for Europe's super-rich and is the southern hemisphere's equivalent of St Tropez on the Côte d'Azur," Cohen said.

It's not unheard of to pay R100000 a square metre for houses here, which puts the price of an average 100m² house at over R10-million.

The rand's plunge in the past two years - down from R6.80 to the dollar to about R10 now - has proved seductive to foreign buyers.

Herschel Jawitz, CEO of Jawitz Properties, said: "This year we sold two properties in excess of R25-million in Hyde Park, Johannesburg, to African buyers.

"We're busy in negotiations with a Congolese buyer for another property as well. South Africa is seen as a relatively stable country from a financial and political point of view."

Peter Gowan of Jawitz said 50% of their sales in the top-end property market are to foreigners.

Traditionally, British and German buyers have held up the foreign market. Now, more than two-thirds of the foreign buyers are from other African countries, in particular Nigeria, the Democratic Republic of Congo and Angola.

Lew Geffen, chairman of Lew Geffen Sotheby's International Realty, said his company had just broken all records over a two-month period for sales on the Atlantic seaboard.

"We've recently concluded a R39-million sale in Joburg and another R30-million in Cape Town," he said.

Of course, it's another story at the bottom end. Demand for homes in the middle of the market is still depressed, and the possibility of another five years of soft returns on property in this tier continues to spook potential investors and first-time buyers.

Rentals at this level are at an all-time high.

Things are unlikely to get worse, especially if there is another interest rate cut, which is possible given the weak rand and the virtually comatose domestic economy.

But they are not likely to get a lot better very quickly - single-digit year-on-year house price growth is forecast for 2013.