The Atlantic Seaboard and City Bowl are officially the most expensive places to buy a home in the country.
This is according to a recent study that was conducted by Seeff Property.
The study notes that nine of the top 10 most expensive suburbs in South Africa are in Cape Town, with Clifton topping the list. Seeff says the study is based on data from Lightstone and Propstats for the period between 2011/12 and 2016/17.
The top 10 suburbs, according to Seeff, are Clifton, Llandudno, Bantry Bay, Sandhurst in Sandton, Camps Bay, Fresnaye, Waterfront, Bishopscourt and Constantia Upper.
The average selling price on the Atlantic Seaboard has also more than doubled over the past five years, with the biggest gains in Fresnaye (+167%) and Camps Bay (+128%), the latter attracting the highest number of R20 million-plus sales.
In Fresnaye there is a seven-bedroom house being listed for
R175 million while in Clifton a five-bedroom house is going for R145 million.
The only suburb to make the list, which is not in Cape Town, was Sandhurst in Johannesburg.
While some may see this as positive, others said it made property ownership unaffordable, especially for first-time buyers.
Samuel Seeff, chairman of Seeff Properties, said the prices paid were due to supply and demand.
“The Atlantic Seaboard location and views are highly sought-after, but there is limited land space.
“With property in such high demand, those with money are therefore prepared to pay a premium to secure a property in the area.
“The Atlantic Seaboard, while the most expensive area in the country, is not unique in its unaffordability for first time buyers. First time buyers cannot really buy in Bishopscourt or Sandton (Johannesburg) or many other upper income areas either.”
Mr Seeff said that the property market was a key contributor to GDP.
“It is always positive when it is busy and generating higher prices because that means more transfer duty and property taxes which is already a major source of government revenue.
“Having such attractive and high demand areas, generates interest and encourages South Africans to invest in property, even in their own areas, it makes owning your own home, no matter where it is located, a sought-after activity and this is good for the country.
The negatives are that affordability is becoming a major issue, but there are plans in place to provide more affordable housing.”
He added that most of the Atlantic Seaboard properties, especially those above R5 million, were cash sales.
“The top end properties are not bought by salaried individuals – Atlantic Seaboard top end buyers tend to be top business entrepreneurs and executives with considerable wealth and investments.”
Mr Seeff added that that is a common misconception that foreigners were paying the highest prices for property. “South Africans have paid the highest prices on the Atlantic Seaboard and bought over 85% of all property.”
Janine Myburgh, President of the Cape Chamber of Commerce and Industry, said this meant there was new money coming into the city and a vote of confidence in Cape Town. “The new owners use local firms for alterations, improvements, repairs, maintenance and garden services and use local businesses for a variety of other services such as catering, shopping and cleaning.
“In addition, the presence of high net-worth individuals lifts Cape Town’s international profile, making the city a more attractive destination and increases its power to attract tourists.
“One must also remember that local sellers of property do very well and when they down-size they have extra money for their retirement.”
Ms Myburgh added that the biggest winners in this scenario were “probably the City Council as high property values tend to increase their income from rates”.
Overseas buyers, she added, used strong currencies to make their purchases, which gave them a significant advantage over local buyers.
“The general effect is that it tends to increase property prices, particularly in the most desirable areas. The effect spreads to other areas as local buyers have to settle for the second best areas. This makes it much tougher for first-time home buyers.
“The problem is not unique to Cape Town. London, for instance, has attracted the wealthy from many countries and this has forced up the property prices to the point where, say, a nurse, teacher or artisan cannot afford property within easy reach of the central city. To deal with situation the local authorities have been forced to subsidise public transport and build council houses and flats.”
Brett Herron, Mayco member for transport and urban development, said the City was aware of the “unprecedented growth” in the property market in areas close to key nodes of employment, and along public transport routes. “The investment affirms that Cape Town is a city that works and that more and more South Africans opt to settle here.
“The flipside of the coin is, however, that inequality is worsened when these investments mostly benefit those who already have access to the economy and employment opportunities.
“As much as we welcome the investment, there is an obligation on the City and on the private sector to ensure that the inner-city and other central business districts are accessible and affordable to those who are still living on the periphery. This obligation stems from the commitment that is required from all of us to make Cape Town an inclusive and liveable space where there is room for everyone, and where we share access to opportunities, regardless of income.”
Mr Herron added that over the past few months the City had been working to make this commitment a reality and had identified 10 City-owned sites in Salt River, Woodstock and the city centre to be developed for affordable housing opportunities for those who need it most. Three of these sites have already been allocated to social housing institutions. He added that City does not set or influence prices of private property. However, their focus was to implement new housing projects for those who require and qualify for State assistance. “In this regard we are working to ensure that affordable housing is available in well-located areas including the city centre. We will make those plans known within the next few weeks.
“We are also examining the role that the private sector can and should play in the provision of affordable housing within private developments. This is required in many cities across the world.”
He said the City were engaging with a number of stakeholders, including the private developers, on how this should be implemented.
