Property Flash


February 20 2023

This is a guest article by Seeff Property Group.

There is a clear flight of property wealth to the Western Cape, but Samuel Seeff, chairman of the Seeff Property Group says, it is potentially also going offshore.

The wealthy are investing in luxury homes but they are spending less than what they could with the rest of their capita, being potentially invested offshore.

“What is happening at the top end of the property market has always been a reliable initial indicator for investment in the country. It is the ‘canary in the coal mine’ so to speak,” says Seeff.

“We see clearly, that despite two exceptionally good property years, and a record number of sales above R20m in the Cape especially last year, we can clearly see that the upper price limits are now growing and it has stagnated in the Sandton and Johannesburg area,” he says.

Business and consumer confidence are worryingly low, and the wealthy are “voting with their wallets” showing that the wealthy are not confident about their investments. There is growing concern about where the country is heading.

“Nowhere is this better demonstrated than when you compare Cape Town and the Johannesburg/Sandton area. There has basically been slow movement above the R10m price band for the last 10 years and upper price limits are not moving at all,” says Seeff.

Despite the record number of sales above R20m in the 2022-year across the Cape Town Metro last year, upper price limits have remained more or less the same as it was five years ago.

It is notable that more properties were sold by Seeff above R20m million in Stellenbosch, 10 sales with a combined value of about R330.6m over the past year compared with Sandton and Johannesburg where just seven sales worth under R194m were recorded.

The upper end sales in the Johannesburg and Sandton areas were also mostly in the lower R20m range with only a single high value sale of R50m in Steyn City.

“The highest price achieved in Sandhurst, reached only R30m, well below what we should expect for what is one of the two top suburbs on the continent,” said Seeff.

In Cape Town too, sales are mostly in the lower R20m range despite a record 120 properties worth a combined R3.7bn sold above the R20m last year. Only just over a handful of sales were above R50m and the top end price ceiling has hardly moved since around 2015.

2022 Sales Volumes – Cape Town vs Johannesburg/Sandton

 JohannesburgCape Town% Diff.
Combined R10m+160546241%

Source: Seeff/Lightstone

There appeared to be no sales above R50m in Clifton or at the Waterfront last year which is concerning given that it was a record year for this sector and these are absolutely prime locations.

R20 million-plus Sales – Cape vs Johannesburg/Sandton

 Area Number of Sales Value of Sales (rounded) Highest PricesPaid above R50m
Sandton/Johannesburg7R193mR50M (Steyn City)
Cape Town(Atlantic Seaboard (85), Southern Suburbs (33))120R3.7bnR125m (Bantry Bay)R100m (Constantia)R74m (Bantry Bay)R72m (Bantry Bay)
Other areas8R167m 
Total sales145R4.4bn 

Source: Seeff/Lightstone

A strong property market supported by wealthy buyers is the cornerstone of a strong economy, Seef explains. Real estate contributes about 6% of SA’ total GDP and supports just over 3 jobs, direct and indirect, for every R1m generated.

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