Cape Town’s luxury property market vs the most expensive cities in the world

 ·2 Mar 2024

The luxury residential market in Cape Town is one of the best performing in the world.

This is according to the Prime International Residential Index (PIRI 100), which tracks the performance of 100 city, sun and ski locations globally, found within Knight Frank’s Wealth Report.

The PIRO 100 surprised on the upside in 2023, with 80 markets recording flat or positive annual price growth.

“Yet at the start of 2023, economists were expecting a much weaker outcome. Stock markets were headed for more pain, inflation was veering out of control, and the pandemic-fuelled property boom was set to end in tears as borrowing costs hit 15-year highs in some markets. Right? Wrong,” Knight Frank said.

“The ‘soft landing’ adage applied as much to luxury property markets as to monetary policy, with the index posting a solid 3.1% gain overall.”

Manila saw the most growth (26%), followed by last year’s frontrunner Dubai (16%), with the Bahamas completing the podium.

Cape Town, along with the Algarve in Portugal, with a 12.3% annual change.

“Along with rising prices, we have also seen an increase in the number of properties that have traded in the prime market,” said Nick Gaertner, Director and COO of Knight Frank South Africa.

“The favourable currency for foreigners, as well as unmatched value for money lifestyle continues to attract both local and international buyers to Cape Town.”

“With the city being well managed relative to the rest of South Africa, together with its prime location regarding its proximity to some of the world’s best known winelands, mountain trails and Blue Flag beaches, the influx of buyers and resulting upward price shift is expected to continue for the foreseeable future.”

#City Annual % Change
3The Bahamas15.0%
=4Cape Town12.3%
Source: Knight Frank

What you can get across the globe

Often, to the surprise of buyers, there is a significant variation in prime prices across the luxury residential market.

For instance, US$1 million (roughly R19 million amid major rand fluxations) only buys 16 sqm in Monaco.

The same applies to second homes, where buyers in Cape Town can get nearly 10 times the amount of space for US$1 million compared to Aspen, USA.

With this in mind, BusinessTech looked at what US$1 million can get in South Africa vs the most expensive second-home destinations in the world:

  • 3 Bedroom Apartment in Sea Point, Cape Town
  • Price: R19,000,000
  • 237 SQM

  • 1 Bedroom Apartment in St Tropez, France
  • Price: €990,000
  • 48 SQM

Read: Take-home pay increases in South Africa – but storm clouds are gathering

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