Six homes in Cape Town sold for between R26 million and R66 million

·27 Aug 2024

Pam Golding Property CEO Andrew Golding says the luxury end of the South African housing market has seen remarkable strength with numerous multi-million-rand house sales.

This comes as the outlook for South Africa’s housing market is looking increasingly optimistic with several positive indicators.

The positive developments include petrol price cuts, an imminent interest rate cut, improved confidence, and the prolonged load-shedding reprieve.

Golding said sellers and buyers, including investors, who had previously been hesitant about property transactions are now committing to them.

The Pam Golding Residential Property Index confirms this trend. National house price inflation rose to 4.7% in July 2024, the highest level since February 2022.

The luxury end of the market has been particularly strong with a significant reduction in stock levels, driving up prices.

“Confidence has returned to the luxury property market, driven by positive sentiment, improved financial conditions, local stock markets, and stable government,” Golding said.

There are significant stock shortages in the Cape’s luxury market, and due to limited stock, pressure is building in pricing.

In the market’s high-end or R20-million-plus bracket, Pam Golding Properties has concluded some notable sales on the Atlantic Seaboard.

The sales include a house in Clifton which sold to a Gauteng-based businessman for R66 million.

The company also sold a house in Camps Bay for R33.8 million and an apartment in Mouille Point for R27 million.

“In sought-after Constantia Upper in Cape Town’s Southern Suburbs, we have concluded notable home sales for R54 million, R45.5 million, and R26 million,” he said.

In the Boland and Overberg regions, the company has successfully concluded individual sales of homes for R20 million plus.

Somerset West has become a popular destination for rich South Africans, while areas such as Paarl, Hermanus and Durbanville also attract new buyers.

Golding said the expansion of the Cape Winelands Airport into an international commercial airport is significant for this region.

The airport is set to open in 2027 for domestic and international flights, adding value to properties in the region.

Another positive development is road infrastructure upgrades, including extending the R300 from the N1 to the urban edge north of Wellington Road in Durbanville.

“It will form a ring road around the Cape metropole and accommodate increasing traffic volumes,” Golding said.

It is not only the high-end of the South African property market which is improving. The lower-end is set to experience a big improvement with lower interest rates.

“The lower end of the market, including first-time home buyers, is particularly sensitive to the higher interest rates currently applicable,” Golding explained.

Green shoots are appearing in the low-end of the market with confidence that the interest rates will soon start decreasing.

According to ooba, national applications for first-time buyers rose to 46.6% in July 2024, rebounding from a subdued 44.3% in June.

“This anticipated rebound in first-time buyers is likely to see stronger demand for homes around the R1 million mark in urban nodes, which typically means sectional title properties,” he said.

Furthermore, mortgage applications from self-employed individuals rose to a record 13.3% in Q2 2024, and cash sales soared to a record 60.2%.

“The recent surge in local cash buyers has seen a sharp increase in demand for investment properties, particularly in the Western Cape,” Golding said.

Golding said that overall, there are growing expectations that the GDP growth rate in 2025 may surprise on the upside, which will underpin the housing market.