‘Superhomes’ in South Africa are selling again, but at a fat discount

 ·6 Mar 2021

Between 30% and 50% of the high net-worth individuals (HNWIs) globally are planning to buy at least one additional luxury property within the next 12 months, compared to just 20% a year ago, according to the latest research conducted by Luxury Portfolio International (LPI) and Leading Real Estate Companies of the World (LeadingRE).

In addition, the latest statistics from the US reveal that luxury home sales there have been soaring since September 2020 and are currently almost 61% ahead of where they were at the start of last year – despite the fact that the US has been so hard hit by the Covid-19 pandemic and its economic aftermath.

Competition among buyers has also increased and the average listing time for luxury properties has dropped from 82 days to just 55 days, even though the number of new luxury listings coming on to the market has risen by almost 32%.

“Luxury real estate is back in first place among the most favoured investment options for HNWIs,” said Rory O’Hagan, head of the Luxury Portfolio division of the Chas Everitt International property group.

“Stock markets everywhere have been hammered by the pandemic and are likely to remain volatile as its the economic, social and political effects continue to play out, which makes it very difficult to keep track of the returns on equity investments. And along with gold, real estate has traditionally been seen by investors as a safer alternative in such circumstances.”

Secondly, he said, luxury real estate prices have fallen drastically since 2019, and astute investors are taking the opportunity to upgrade to bigger and better primary residences, or to purchase additional properties in the expectation of excellent future value growth.

“Indeed, we are currently also seeing this scenario play out in all the luxury home markets across SA, from the Southern Suburbs of Cape Town to the North Coast of KwaZulu-Natal, where well-priced properties are definitely selling much more swiftly than they were a year ago.

“In Johannesburg, for example, we recently sold a super-luxury home in Sandhurst in Johannesburg for R35 million after the price was lowered from R45 million and another home in Westcliff where the price was lowered in January to R19.75 million from R28 million previously,” he said.

“In the past few months, we have also sold a large number of discounted luxury apartments in Rosebank and Sandton to HNWIs who were withdrawing their funds from equity markets, and in exclusive Hyde Park, we recently sold out the units in a brand new upmarket cluster development because they were marked down to 50% of the original asking price.

“And now we are anticipating a similar result in the case of the ultra-luxury Gatsby mansion on Houghton Ridge, which recently become available for sale at R64.8 million – or about 45% less than its original asking price two years ago.”

Designed and furnished by the Pellerade Design House, Gatsby recently featured in a Netflix TV series but is not currently occupied. Billed as a superhome, it boasts lavish living areas, eight glamorous en suite bedrooms, luxurious bespoke furnishings, an art collection, full smart home automation and expansive terraces and gardens with sweeping views right across Johannesburg to Pretoria.

Gatsby also boasts extensive business and conference facilities; a private spa, a gymnasium, a heated indoor pool and a salt-water outdoor training pool, as well as a private “nightclub” and entertainment centre based on the Buddha Bar in Paris.

“The past year has dramatically altered the expectations and requirements of HNWIs when it come to their homes,” said Stephen Pellerade, CEO of the Pellerade Design Group.

“While resembling 7-star boutique hotels, these luxury oases now also need to offer complete business functionality to facilitate long-term remote work.

“And Gatsby does that and much more, so it is the perfect solution for the HNWI investor who is seeking a whole-life home and base of business operations in Johannesburg, which is the financial heart of SA and shortly also due to become the gateway to a single African market made up of more than 1,2bn consumers and worth more than $2 trillion a year.”

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