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The Western Cape\u2019s market rebound in 2021 has been very encouraging and if the impact of the latest Covid variant can largely be contained, 2022 looks to be a very promising year with steady demand and renewed semigration underpinning a strengthening market if the impact of the new variant can be contained.<\/p>\n
This is according to Arnold Maritz, co-principal for Lew Geffen Sotheby\u2019s International Realty in Cape Town\u2019s Southern Suburbs and False Bay: \u201cMost of the property sectors in Cape Town have fared well this year compared to some of the inland cities across the country and we\u2019ve also seen a promising revival at the top end of the market which has borne the brunt of the downturn.<\/p>\n
\u201cLooking at the 12-month window from March 2019 to February 2020, Propstats data shows a total of 209 luxury homes (R10 million-plus price band) were sold in the Cape Town peninsula during that period at an average selling price of R17.3 million.<\/p>\n
\u201cIn the most recently reported 12-month period, from November 2020 to October 2021, 266 properties in this price band changed hands, with an average price of R18 million. The increase in volume from pre-Covid to post-Covid is thus a significant 27 percent.<\/p>\n
According to Lightstone, price inflation in the Western Cape has risen steadily this year, from just 4.3% in 2020 to 6.9% by the third quarter of 2021. Maritz said that there were three noticeable trends in the province during 2021, all of which were significant market drivers.<\/p>\n
\u201cThe first is a renewed preference for purchasing a property rather than renting which has been largely due to the favourably low-interest rate and saw the number of first-time buyers increase for the first time in a number of years.<\/p>\n
\u201cThe second trend has been a move away from the low-maintenance, compact apartment-style living in preference for larger freehold freestanding properties with more space and at least some garden. This shift is largely as a consequence of the \u2018cabin fever\u2019 experienced my many during hard lockdown.<\/p>\n
He said that the pandemic has also sparked the third trend – an increased number of people looking to move away from the larger metros to smaller towns and coastal areas, due to their new-found ability to work from home. This has also sparked a new wave of semigration to the Western Cape.<\/p>\n
\u201cAccording to the main findings of an assessment of semigration trends presented by Lightstone\u2019s head of digital, Hayley Ivins-Downes, middle-class homeowners are leaving Gauteng in increasing numbers with the Western Cape as their preferred destination and we are also fielding increased inquiries from other provinces.\u201d<\/p>\n
Chris Cilliers, CEO and co-principal for the group in the Winelands echoes Maritz\u2019s sentiments regarding market revival and the impact of the new variant.<\/p>\n
\u201cThis year we saw a significant rise in market activity and with the local market driven by pent-up demand and semigration. There has also been renewed interest from international buyers taking advantage of the weaker Rand will certainly be affected by South Africa\u2019s red list status, however, if the travel ban is lifted again soon, we are confident this sector will pick up again.\u201d<\/p>\n
The luxury market has also rebounded in the Winelands and Cilliers reports a \u201cfantastic year in terms of high-priced properties\u201d. \u201cOur biggest worry has been stock shortages \u2013 even at the top end of the market \u2013 as demand has to a large extent outstripped supply in many of the areas in which we work.\u201d<\/p>\n
Another popular area is the Garden Route and, according to Steve Neufeld, manager principal for Lew Geffen Sotheby\u2019s International Realty in Plettenberg Bay, by the end of October, it had already become clear that 2021 is set to surpass previous years and that semigration was a key driver.<\/p>\n
\u201cFor the property market as a whole, the average value increased by 9% from 2019 to 2020 and then a dramatic 38% in 2021 to R3.4 million. From 2019 to 2020 the number of sales increased by 20% to 418, and the total value increased by 30% to R1.058 billion.<\/p>\n
\u201cBuyers are still predominantly from Gauteng and Plett at around 30% each, although Gauteng is a little higher this year, followed by Cape Town (12%) and 20% from the other provinces combined with international buyers making up about 8% of the market,” Neufeld said.<\/p>\n
He pointed out that entry-level prices have increased in 2021. \u201cFull title homes now start at about R1.85 million, up from R1.75 million in 2020 although, with stock shortages, it\u2019s hard to find anything below R2.2 million and the entry-level for sectional title units has increased from R750 000 to R950,000. Vacant land starts at about R295,000 in gated estates and R525,000 in open areas (up from R425,000).\u201d<\/p>\n
And the previous historical record sale price of R50 million for residential property in Plett, which was set in 2006, was also beaten in 2021 with the sale of a R55 million beachfront home on Beachy Head Drive, said Neufeld.<\/p>\n
\u201cIn 2020 the highest price achieved was R44million for a beachfront home in a gated estate on Robberg Beach and in 2021 there have already been 19 sales above R10 million.\u201d<\/p>\n
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