Cape Town luxury property market grows second-fastest in the world
Cape Town has registered the second-highest growth in luxury house price rankings for the period from March 2017 to March 2018‚ behind Seoul in South Korea.
This is according to the Prime Global Cities Index published by global real estate consultants Knight Frank.
The company said Seoul registered a 24.7% annual growth for this period despite policymakers’ efforts to control price growth‚ including new taxes for owners of multiple properties and tighter lending conditions.
Cape Town’s prices ended the year to March 19.3% higher compared to the same period last year.
“Although the wider city market is cooling‚ a lack of supply in the prime areas we track in Camps Bay‚ Bantry Bay and the Atlantic Seaboard is pushing prices higher‚” Knight Frank said.
Deon de Klerk‚ head of wealth for Africa regions at Standard Bank‚ said Cape Town was fast becoming a truly global holiday destination and an increasingly desirable residential address for South Africa’s high net worth individuals‚ as well as those from abroad.
“The luxury residential property market in the city has really been able to capitalise on its new-found reputation as the ‘Monaco of the South’‚” De Klerk said.
Typical prices in Cape Town ranged from R1.2m for a small studio apartment to R30m for a penthouse apartment.
Two-bedroom‚ two-bathroom apartments with secure parking fetch about R5m on average‚ the report said.
In the last two years Cape Town has set South African records for both the highest-ever sale price paid for a residential home - R290m for a house in Bantry Bay - as well as the highest-ever rental price‚ R450 000 per month for an estate in Constantia.
Knight Frank said its latest index was a valuable means of gauging where luxury prices were headed at a time when - despite the global economy being in robust health - there were significant risks ahead in the form of rising debt‚ inflation and housing market regulation.
“As borrowing costs start to increase some of the world’s major economies‚ we expect prime price growth to moderate further‚” Knight Frank said.
Knight Frank said cities in Asia Pacific now accounted for five of the top ten rankings in annual growth. Aside from Seoul‚ Guangzhou (16.1%) and Shanghai (10.9%) in China‚ Sydney (8.7%) and Melbourne (8.3%) in Australia also featured in the top ten.