Research group New World Wealth has published its latest report on South Africa’s prime residential prices, which were shown to be down in the first quarter of 2018.
As part of the group’s research, it looks at the price of property per square metre in prime property areas across the country.
It identified these three prime locations:
- Altantic Seaboard, Cape Town (including Batrny Bay, Clifton, V&A, Fresnaye and Camps Bay)
- Umhlanga; and
- Central Sandton
According to New World Wealth, prime apartment prices in Cape Town have contracted from around R75,000 per square meter in Dec 2017 to around R72,000 per square meter currently (March 2018).
“This is probably due to the drought which has harmed the residential market there. CT also had a poor December/January holiday season with many travelers staying away from the city due to the drought – this would have negatively impacted on the number of potential buyers,” the group said.
|Prime area||ZAR per sqm 2017||ZAR per sqm 2018||200 sqm Apartment Price|
|Atlantic Seaboard, Cape Town||75 000||72 000||15 000 000|
|Umhlanga||36 000||37 000||7 200 000|
|Central Sandton||34 000||33 000||6 800 000|
Prime apartment prices in Central Sandton are also down, from around R34,000 per square meter in Dec 2017 to around R33,000 per square meter currently.
The only prime spot of the three to buck the trend was Umhlanga, which saw prime apartment prices rise from around R36,000 per square meter in Dec 2017 to around R37,000 currently).
“This is possibly due to the fact that many foreigners and locals are now going on holiday to Natal instead of the Western Cape due to the CT drought impact. There is also an uptick in prices in surrounding areas such as Ballito, Zimbali, La Lucia and Zinkwazi,” the group said.
The most expensive streets in South Africa
|Street||Suburb, City||200 sqm Apartment Price (ZAR)||ZAR per sqm|
|The Ridge & Cliff Road||Clifton, Cape Town||19 000 000||95 000|
|Victoria Road||Clifton and Bantry Bay, Cape Town||18 400 000||92 000|
|V&A Marina, Dock Road,||City Bowl, Cape Town||18 000 000||90 000|
|Nettelton Road, Clifton||Clifton, Cape Town||17 400 000||87 000|
|Clifton Road,||Clifton, Cape Town||17 000 000||85 000|
|Kloof Road||Clifton and Bantry Bay, Cape Town||16 800 000||84 000|
|Ave St Leon||Bantry Bay, Cape Town||16 000 000||80 000|
|De Wet Road||Bantry Bay, Cape Town||15 600 000||78 000|
|Ave Marina||Bantry Bay, Cape Town||15 200 000||76 000|
|Ocean View Drive||Bantry Bay, Cape Town||15 000 000||75 000|
The two streets outside of Cape Town which ranked as the most expensive include Beachyhead Road, Plettenberg Bay (R8.6 million for a 200 sqm apartment, or R43,000 per sqm) and Lagoon Drive, Umhlanga (R7.2 million, or R36,000 per sqm).
Most expensive suburbs
|Suburb||200 sqm Apartment Price (ZAR)||ZAR per sqm|
|Clifton||16 400 000||82 000|
|Bantry Bay||15 200 000||76 000|
|Fresnaye||12 200 000||61 000|
|Camps Bay||11 200 000||56 000|
|Bakoven||11 200 000||56 000|
|Llandudno||10 800 000||54 000|
|Granger Bay||10 800 000||54 000|
|Mouille Point||10 400 000||52 000|
|Greenpoint||9 600 000||48 000|
|City Bowl in Cape Town||9 400 000||47 000|
|Three Anchor Bay||8 000 000||40 000|
|Umhlanga||7 200 000||36 000|
|Seapoint||7 000 000||35 000|
|Bishopscourt||7 000 000||35 000|
|Central Sandton||6 800 000||34 000|
|Constantia||6 400 000||32 000|
New World Wealth noted that its indices work off a different basis from most other SA residential indices – where it tracks the average square meter prices achieved in selected prime 200 to 400 square apartment complexes in each area, which it believes is the best way to check for price movements.
The group focuses on the most exclusive apartment complexes in each area (i.e. Prime).
The four main ways used to check price growth in an area include:
- Transaction indices – these are normally compiled by major banks. They are based on the total/average value of purchases that go through the bank during a period. In our view, these are the least accurate – they are often restated heavily over time.
- Average sales price indices – also normally compiled by major banks. These indices can be distorted by big sales (i.e. the sale of a mansion) during a particular month/quarter.
- Repeat sales indices – this index is very accurate but difficult to compile over a short period of time or in a small area as it requires multiples sales on the same property.
- Square meter price growth – we use this one. By focusing on sales in certain apartment complexes one can get an idea on how square meter prices are changing. This does not require a large sample.
“Normally for an area such as Bantry Bay, tracking three to four prime apartment blocks can give one a very good indication of price movements. The only limitation of these indices is that they only work well on apartments as houses normally have gardens and additional land which is difficult to value on a square meter basis,” NWW said.