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Are high-end property buyers returning to the Cape Winelands?
Category Property News
The top end of the market is often the sector that bears the brunt in a downturn with the biggest drop in sales volumes and prices, but it's also the segment that signals a positive upturn, as renewed activity at this end of the market is an encouraging sign of investor confidence.
This is according to Chris Cillliers, CEO and Principal of Lew Geffen Sotheby's International Realty in the Winelands, who says that her office has seen a spike in enquiries and sales in this sector over the past three months.
"Serious sellers who have had their properties in the market for many months are far more willing to accept that this is a buyers' market and are accepting offers which they may have disregarded a few months ago.
"Educated and experienced buyers know that the best time to buy is during a downturn and, relatively speaking, when the best deals are to be found, especially in the upmarket category."
This is borne out by Lightstone data which reveals that during the past 12 months ending July 31, there were 76 houses were sold in the R3 million plus bracket in Stellenbosch at an average sale price R6.114 million. Of these, 19 sales were during the past three months at an average sale price of R6.949 million.
The average sale price of estate homes in this price band also rose during the same period, from R6.902 million to R7.02 million. In Paarl, the average price of an estate home rose by a solid 23.3% between May and July from R4.836 million to R5.963 million.
"Most of our residential enquiries are from local, established professionals, especially at the upper end of the market, but in certain areas there is still considerable interest from international clients who are looking to buy second homes or are coming to settle in South Africa permanently," says Cillliers.
"At this level, the most sought-after properties are homes in lifestyle estates near good schools which offer a good selection of lifestyle amenities and upmarket retirement developments.
She says security still a major driver and an additional advantage of most of these developments is their easy access to major transport routes and new commercial areas which are now home to many top companies which have relocated from urban areas which are increasingly congested.
"And, with an ageing population of seniors who are healthier and more active than previous generations, the upmarket retirement sector in the Winelands is attracting significant interest from both local and foreign investors."
Cilliers says that their recent top-end sales include residential properties for R8.9 million, R12.5 million, R17.5 million, R9.5 million and R11.9 million, as well as a number of commercial farms with an established income stream.
"The once buoyant market for lifestyle smallholdings is somewhat depressed at the moment, whereas commercial farms with a diversified income stream are receiving considerable interest, especially those which produce products like wine and olives for the export market and those which also offer accommodation."
She adds that there has also been an increased number of commercial enquiries in recent months.
Most popular are units in secure office parks close to major transport routes that offer tenants support services, ample secure parking and additional amenities like cafés and hairdressers so that employees needn't spend their lunch hour stuck in traffic.
"We believe the flurry of renewed activity we are seeing, especially at the upper end of the market, is a very encouraging sign. We live in a massive country with a large, albeit faltering economy, and a multitudinous number of people who don't have the option of emigrating or who have no desire to leave," says Cilliers.
"And many are astute investors who recognise the myriad opportunities to exploit a weaker market, particularly in the Western Cape where prices were very high for a number of years."
Author: Lew Geffen Sotheby's International Realty