Boost for Cape property market

BUOYED by the weak rand, there has been a notable increase in foreign visitor numbers to the Cape this summer and, while a boon for the tourism sector, Seeff's managing director for the Atlantic Seaboard, City Bowl and CBD, Ian Slot, says property too has seen a significant spike in business. For the first time in years, the city has over the past year seen about a 50% hike in foreign buying activity in these seaside areas compared to 2011/12. Most of these sales were cash, bringing direct foreign investment, tax revenues and job growth into the country.

During 2013, about 187 properties worth almost R1.725-billion were sold to foreigners; about 29% of all buying activity in these two areas. This represents an increase of about 50% in sales volumes and about 120% in Rand-value when compared to the 2011/12 period when just over 120 properties worth almost R800-million (representing about 20% of all sales) sold to foreign buyers.

Slot notes that around 12 properties priced above the R20-million price mark sold to foreigners, most notably to buyers from Africa who snapped up five properties priced between R20-million and R30- million, especially in Camps Bay, Bantry Bay and at the V&A Waterfront.

In terms of sales above the R20-million mark, the highest recorded sale to a foreign buyer was in Clifton where three properties, priced between R24-million and R50- million were sold; the latter being the highest price and sold to an Irish buyer. Three properties sold in Camps Bay, two of which were to African buyers; a R20-million villa that sold to a Congolese buyer and a home priced at R30-million that sold to an Angolan. In Bantry Bay, a Nigerian buyer paid R30-million for a home, while a buyer from Barbados forked out R34.5-million.

Noteworthy too, is the fact that two high-value apartments at the V&A Waterfront were sold; a R25-million apartment to a Nigerian buyer and a R52.5-million apartment to a Swiss buyer. The traditional source market regions – being the UK and Europe – continue to invest and more European countries such as France are buying.

A shift to buyers from Africa and the East is however, now borne out by the sales data, says Slot. Countries such as Nigeria, the United Arab Emirates and the Far East, especially Chinese buyers, all show a significant year-on-year increase in buying activity.

There has also been an increase from US buyers.

African buyers now account for about 20% of all sales to foreign buyers, says Slot.

Sales of foreign-owned properties have remained fairly constant at about 14% (about 166 properties worth R500-R600-million) of all sales activity in these two areas over the past two or so years, adds Slot. "This generally leaves us with a net-foreigner buyer effect of about 5%, a negligible outflow."

Yet, he continues, "when we look at the inflow and particularly at the additional inflow during the past year, this is direct foreign revenue and a vital contribution of tax revenues and jobs for South Africans".