South Africa’s luxury property market is booming, with the country’s super-rich buying high-end houses in exclusive neighbourhoods in Gauteng, Western Cape, and Kwa-Zulu Natal.
Grant Smee, managing director of luxury property specialists Frankie Bells, said the sale of luxury properties is showing strong growth.
This market segment seems immune to the lagging effects of the pandemic, with Lightstone data revealing that in 2021, 984 homes valued at over R10 million were sold in South Africa.
“Ultra-wealthy buyers are continuing to exercise their spending power by investing in the luxury property market,” said Smee.
The FNB Property Barometer for July 2022 revealed that 12% of sellers in the R2.6 million to R3.6 million property price bracket said they are upgrading.
It shows that many traditional middle-class families are now moving up the ladder and into the luxury property market.
Smee noted that the South African luxury property market is becoming increasingly attractive to domestic and international buyers.
“Foreigners are attracted to South Africa’s natural beauty and generally temperate winter climate,” he said.
“At the same time, domestic buyers choose to remain in South Africa for the excellent quality of life it offers and how far their rands can stretch locally.”
Areas where the luxury property market is booming
The impact of increased work-from-home policies on the luxury property market is most evident in Johannesburg, particularly in the neighbourhoods surrounding Sandton, which include:
- Hyde Park
Buyers looking to remain in Gauteng but escape the city’s busy life are favouring country and estate living in areas that are less than an hour’s drive out of Johannesburg and Pretoria.
Smee said that buyers in Gauteng are very crime-conscious and will opt for a luxury home in a security estate rather than a freehold home in most cases.
The estates that are in hot demand for these reasons are:
- Midrand’s Kyalami Estates
- Waterfall Estate
Other luxury lifestyle estates in Gauteng seeing an increase in wealthy buyers include:
- Serengeti Estate
- Eagle Canyon Estate
- Southdowns Estate
- Blair Atholl Estate
The Western Cape leads the luxury property market in South Africa by boasting some of the most expensive real estate in the country.
There are many luxury homes on the market in the Western Cape as owners seek to move out of the city in search of coastal living.
“Cape Town is currently the city of choice for buyers in all price brackets, and the luxury property segment is no exception. A lack of supply in the most desirable neighbourhoods has driven up prices, with wealthy buyers willing to sacrifice square footage for ocean views and proximity to beaches,” said Smee.
Local buyers are looking in areas that offer security estates and where the province’s top government and private schools are.
International buyers are also significant contributors to the activity in the Western Cape, particularly in Cape Town’s Atlantic Seaboard, where an estimated 20% of all luxury property transactions are sales to foreign buyers.
These buyers search for homes that boast exceptional views, high-end design, extensive security measures and proximity to breath-taking attractions such as the beaches of Clifton or the mountains of Franschhoek.
For these reasons, the most sort after neighbourhoods in the Western Cape are:
- Plettenberg Bay
Much like the Western Cape, luxury property is in high demand in Kwa-Zulu Natal (KZN) as many buyers seek coastal living.
While demand for luxury property took a significant hit following the 2021 riots in the province, homes in coastal towns such as Umhlanga and Ballito are still selling for as much as R31 million.
The abundance of excellent private schools in the province – such as Hilton and Michaelhouse – has also contributed to demand.
This is because parents want to be close enough for their children to come home from boarding school on weekends.
High-end buyers in the province also prefer homes in lifestyle and security estates over freestanding properties, and therefore the most popular areas to buy in KZN are:
- Mount Edgecombe Estate
- Cotswold Downs
- Simbithi Eco-Estate