[imagesource: SAOTA]
The Cape Town luxury property market had taken a knock even before the pandemic put a damper on sales.
At the start of 2019, things seemed to be looking up. From then on out, there was a sudden rush of headlines like ‘Cape Town Property Experiencing Negative Growth‘.
By August, the FNB House Price Index for the second quarter of 2019 warned that “house price growth in virtually all the upmarket sub-regions of the Cape Town metro [had] fallen deeper into deflation”.
As the year drew to a close, luxury homes were selling, but for well below market value.
As 2020 rolled around, there seemed to be little change to the market and then, to make things worse, the pandemic hit.
Despite the economic losses faced by most industries, experts predicted a “boon for the market” during the “emergence phase” for the middle and lower-end housing market, while property groups seemed divided on the effect of the lockdown on the high-end housing market, especially with regard to international buyers.
As lockdown restrictions ease up, the middle and lower end of the property spectrum is behaving as predicted, with an uptick in activity, while once sought after luxury properties on the Atlantic Seaboard (Clifton, Camps Bay, Fresnaye, and Bantry Bay) are on the market in higher numbers than before, but they aren’t selling.
In fact, if you look at the R20 million-plus “super luxury” Atlantic Seaboard market, there have only been four sales in 2020, which is the lowest level in a decade.
Contrast that with the boom of 2016 and 2017, when there were around five sales a month in the same price bracket, and you can see the full extent of the decline.
BusinessTech spoke to property group Seeff’s managing director, Ross Levin, who put a positive spin on things with regards to the rest of the market:
“With no real price movement in the super prime sector, this is arguably one of the best periods for ‘bargain hunting’ that we have seen in the last decade,” Levin said, adding that that there are now many new listings not seen before while sellers are motivated to take lower offers.”
Market data points to an unprecedented shakeup of both residential and commercial property, with average house prices set at between R1,5 million and R3 million, down 5% this year.
TimesLIVE is calling this a “bargain bonanza” for house hunters, with luxury mansion prices down by up to 40%.
Seeff Property Group chair Samuel Seeff said the depreciation of the rand may also assist bargain hunting.
“It means that high-end property is now about 20% to 30% cheaper for those paying in dollars, pounds or euros. Prices are already down by about 20% since 2018 and we expect a further decline of around 20% to 30%,” he said.
The pandemic has had a significant impact on all business sectors, and the ever-changing nature of the disease makes it difficult to predict how this will play out in the coming months.
For the time being, it might be worth holding onto the Clifton property until things improve.
[sources:businesstech×live]
