Cape Town's booming property market
Category Property News
It has the most expensive street in Africa, yet Cape Town still offers incredible value. President Jacob Zuma's snubbed call for the seizure of white-owned farms has not put Philip Humphreys off buying a home in South Africa. He's about to do it for the third time - trading his £8.7m grand design in Cape Town for a pied-à-terre nearby. "When I consider all the pluses here, they overcome the negatives," says Humphreys, 65, a retired British hotelier, as he gazes at the Atlantic from his six-bedroom villa on Nettleton Road, in Clifton - the most expensive street in Africa. Then, like every other British buyer I talk to, he rhapsodises about the "wonderful restaurants" at half London prices, the expanses of beach and mountain that have made him "fitter than ever".
And all a jet-lag-free overnight flight away, as handy for long weekends as for months of winter warmth. "The world has shrunk dramatically for people looking for a home in the sun," says David Forbes, director of Savills estate agency's private office. "Cape Town has become the destination of choice. Prices in the Caribbean are extortionate and there are concerns over the zika, dengue and chikungunya viruses, especially for young families. Unrest means the Middle East is out, and Asia is too far."
Last month, Zuma called for "expropriation without compensation" of white-owned land. "He does South Africa no favours, but I can only believe the ANC will see they need stability," Humphreys says. Last year, the party, which has ruled since apartheid ended in 1994, lost three further cities to the opposition Democratic Alliance. (The DA already runs Cape Town and has its first black leader, Mmusi Maimane.) Humphreys and his partner, Glyn Newman, 62, sold their country hotel in Cheshire to become "swallows", seeking year-round summer at homes in Mallorca and Clifton.
In 2011, they knocked down a R20m (£1.25m) house beside Lion's Head to make way for a seven-storey design by a local starchitect, Stefan Antoni. Sliding glass walls connect the open-plan living space to the rooftop pool, while bottles of South African wine ("Another reason to be here") appear to float in thin air in the bonded glass wine cellar. "But it's time to scale down," Humphreys says. The couple plan to buy a two-bedroom flat in the area, so are selling up for R145m.
"At one stage, there seemed to be a lot of British retired people who bought large properties here. Now they're buying more pieds-à-terre," says DG. Big or small, each purchase is driven by a love of Cape Town, not a quest to invest. "People don't come here to buy - they come here, then they buy," says Billy Rautenbach, Atlantic seaboard director at Seeff estate agency. Sir Claude Hankes, 68, an international strategist with links to the royals and the Thatchers, "had no intention to buy" when he first saw his Bantry Bay home in 2011. "I couldn't resist it," he says.
Having paid R22m, he hired 50 people for three years to replant 6,000 fynbos plants in the grounds beneath the Twelve Apostles mountains. To the three-bedroom manor, they added carved Indian balconies, temple columns and a Mughal emperor's tea house perched above the pool. When a former governor of the Bank of England visited, he said: "I'd read about paradise, but it's the first time I have experienced it." Hankes is now downsizing "to the Ritz" and wants a buyer who will cherish his creation, which is on the market for R69m. Cape Town still offers "incredible value", DG says. Last year she sold a home in Clifton to a German businessman for R290m (£18m) - the highest price ever paid in Africa. He had also looked in St Tropez and Ibiza, but realised "he couldn't get a house with views like that for the same price". Yet stock is at its lowest in a decade. "Semigration" from the rest of South Africa has pushed prices in the Western Cape up 8% year on year, according to the FNB House Price Index - far above the 0.8% national average.
"We've had people descend from Johannesburg and Durban like never before," says Basil Moraitis, area manager for Pam Golding Properties. Locals joke that the move is "like living in the presidential suite of the Titanic". The semigrants compete with European swallows, who are getting younger. "We've had multiple offers on almost every property," Moraitis says. "Make your best offer upfront - don't try to negotiate." Run-down flats between Beach Road and Main Road, in Sea Point, are the "last pocket of value" along the Atlantic seaboard. His advice? "If you find a one-bedder for less than R2m, snap it up." Or look for a three-bedroom house priced below R4m along the coast in Hout Bay, or in the southern suburbs around Claremont. Foreign perceptions of crime in South Africa are "overstated", says Michael Werneyer, of the buying agency Thabalanga.com. "Secure estates are initially in demand, then clients realise it's not that bad and will look at standalone homes." Beyond the Atlantic seaboard, however, it is hard to let your home for short periods when you're not there, according to Coen Bezuidenhout, of Re/Max, in Somerset West. "Winter is fairly dead." The V&A Waterfront is "the best investment area", with 70% short-let occupancy, Rautenbach says. There are secure flats from R9.5m a stroll across the marina from boutiques, restaurants and the new Silo district, around the first modern art museum in Africa - designed by Thomas Heatherwick in a historic grain silo.
The nearby City Bowl, where two-bedders in need of work start at R3m, has similar year-round appeal. Look for a balcony or big windows with a mountain or sea view, Rautenbach says - and "parking is essential". If you want a villa that will wash its face, head to Camps Bay, where prices start at R10m and occupancy is 60%. The comedian Ruby Wax owns a home in neighbouring Bakoven. "It has the most demand by far," says Simon Kneel, a former lawyer from Devon who now manages more than 250 Cape Town properties for mostly British owners (capeportfolios.com). Pick a home close to the beach, with access to a pool - the sea is icy - and avoid the windiest pockets of the bay, he adds. David Rodwell, 62, a property investor from southwest London, expects to let his new five-bedroom house a block from the beach in Camps Bay for up to R1,500 (£90) a night. "Everybody speaks to me in English. I feel less likely to be ripped off than in France," says Rodwell, who also owns two French homes. He and his wife, Ursula, 57, wanted a base for African safaris with their five adult children. They bought a R9.5m cottage in 2015, knocked it down and spent R9m on the rebuild; the result has been valued at R32m. But Rodwell admits they will always be at the mercy of the exchange rate. "Profit was never the purpose. If we lose money, we lose money. If South Africa does gently slide the way of Africa, the Western Cape will be among the last to go. It will see us out." Read the full article here.
Author: Martina Lees - The Sunday Times UK