An analysis of the average selling prices for 2023 across the country by a property group showed that nine of the most expensive suburbs are in Cape Town and seven of those are in the Atlantic seaboard and City Bowl.
Only Sandhurst in Johannesburg made it into the top 10.
The Seeff Property Group said these top 10 suburbs now all command an average price of well above R10 million and in the top suburbs of Clifton and Bantry Bay the average is now just about R20 million.
There had been three Johannesburg suburbs in the top 10 list five years ago and Higgovale is now also in the list.
“It once again stands as testimony to the allure of Cape Town, but more than that, the absolute confidence in the Cape Town property market,” says Samuel Seeff, chairman of the group.
Cape Town is not just the best city in the world as voted for the eighth year running by the Telegraph Travel Awards this year, but the best place to invest your property money, according to Seeff. Wealthy Johannesburg buyers along with international buyers are all investing in Cape Town, and their confidence has been rewarded, says Mr Seeff.
Despite a challenging year, Cape Town was set to end 2023 with an average transaction price of R2.1 million, according to Lightstone data.
Comparatively, Johannesburg only reached around R1.6m, Pretoria around R1.5m and Durban R1.3m. Sandton averaged around R2.3 million compared to the Atlantic Seaboard which stands on around R8.2 million, based on Propstats sales data.
The average transaction price for Cape Town doubled over the last 10 years and is up by about 35% from the 2019 pre-pandemic year.
Ross Levin, licensee for Seeff Atlantic Seaboard, says it is no surprise that seven of the top 10 suburbs are located in the Atlantic seaboard and City Bowl belt where buyers have spent on average more over the last three years.
He says despite challenges, the market here has traded slightly up on 2022. The market has been made up of a greater quantity of deals, albeit at lower price bands. That said, the market at the upper end still traded up compared to the 2019 pre-pandemic period.
Top 10 suburbs by average selling price in 2023, from Seeff, based on Lightstone/Propstats data:
1 Clifton with a median price of R25 million and highest price achieved R150 million
2 Bantry Bay, median price R22 million, highest price R60 million
3 Llandudno, median price R19.95 million, highest R33 million
4 Sandhurst, median price R19 million
5 Bishopscourt, median price R17.55 million, highest price R90 million
6 Higgovale, R16.2 million, highest price R33 million
7 Waterfront, median price R15.2 million, highest price R54 million
8 Fresnaye, median price R 15 million, highest price R71.25 million
9 Camps Bay, median price R14.8 million, highest price R42 million
10 Constantia upper, median price R13.1 million, highest price R70 million
Several pillars support the Cape Town property market, says Seeff. Aside from own-use residential sales, it has a buoyant rental market for both residential and short-term rentals which makes Airbnb investments a lucrative option, especially with tourism growing. On top of that, the market is further boosted by an influx of semigration and international buyers and tenants.
Mr Seeff says buyers across the price spectrum continue seeing Cape Town as a safe store of wealth. “We have seen that wealthy buyers from upcountry as well as international buyers are prepared to put significant funds into the property market. In fact many Europeans have preferred to invest here over the last two years as they are not as bothered about local challenges as we are.”
Meanwhile, the RE/MAX National Housing Report for Quarter of 2023 showed another quarter of muted growth.
The ramifications of high interest rates are still being felt in the fourth quarter of 2023, with fewer transactions occurring and leaving room for only marginal house price appreciation.
According to Lightstone Property data, as at January 10, the number of transfers, both bonded and unbonded, recorded at the Deeds Office for October to December 2023 amounted to 47 630. When reviewed against the figures from previous RE/MAX National Housing Reports, this amount is down by 17% year-on-year. When compared against the stats from Q3, the total number of transactions is down by 2%.
“2023 was probably one of the toughest years the property industry has faced within the last 10 years or so. Rising interest rates and high inflation paired against a backdrop of geo-political tensions and economic uncertainty made it a challenging year, and the results of the fourth quarter seem to reflect that,” said Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa.
The company said provincially, semigration trend continues to be strong, with the Western Cape claiming four of the top five most searched suburbs on their website during Q4 2023. The top searches in order were Parklands, Rondebosch, Claremont, Sea Point, and Faerie Glen in Pretoria.