FEATURE

BY MONIQUE DU TOIT

According to the latest Pam Golding Residential Property Index , three interesting trends have emerged . First , the price band below R1 million is still very active - recording national price inflation of 6.31 % compared to the average of 4.25 % across all price bands . Secondly , and unsurprisingly , we ’ ve seen that the Cape Town market continues to grow , with house price inflation of 9,81 % across the Western Cape . In contrast to this , the apparent rebound observed in the Eastern Cape in late 2016 seems to have lost momentum . The third trend is that there seems to be an increase in sales in the super luxury class ( properties valued between R10 million and R50 million ) over the past five years . Similarly , luxury properties ( those priced from R3 million ) have seen steady sales rates .

Coastal properties continue to retain their value at a higher rate than inland properties , with Lightstone ’ s research indicating that properties located within 500m of the coastline showing growth of + 2.7 % in the third quarter of 2017 .

Urban growth

According to recent research by Savills , major global demographic and technological changes are bringing about what is called the “ Fifth Age of Cities .” In effect , this means that global cities are now entering an age where the focus is on quality of life and human capital , rather than traffic and money . This could explain the growing demand for smaller properties within the CBD , rather than larger ones that require a lengthy commute . This is especially evident among young professionals , looking for high quality accommodation within the urban environment .

This trend is not only evident in Cape Town , but has also emerged in the CBDs of Durban and Johannesburg . As central city districts are becoming more established and efficient , we ’ ve seen an uptick in interest from investors to get into the urban property . In Gauteng , the increase in new businesses and office along the N1 between Johannesburg and Pretoria has resulted in what has been called “ Jo-Toria ”, with the two cities effectively merging into

WHO ’ S BUYING ?

Several trends influence the demand for luxury properties , including the migration of HNWI from the north of the country to coastal areas , the increased interest from the investment market , and the small increase of foreign buyers both from Africa and other continents .

The super luxury segment and ultra super luxury segment ( R50 million to R100 million ) are bought by local and international buyers . This seems to be the result of the global ultra-rich looking to diversify their portfolios in property , attracted by the excellent value for money found in South Africa .

According to PGP , foreign buyers make up 3 % of the total , with the majority being from the UK , Germany , Portugal , Belgium , Switzerland , USA , Zimbabwe , and the Netherlands .

a mega-city , housing a population that is projected to exceed 10 million by 2030 .

The Gauteng market seems to be relatively resilient , with suburbs like Sandton , Rosebank , Hyde Park , the “ Parks ”, Houghton , Northcliff , Fairways , Midrand , and Soweto showing strong growth .

In Port Elizabeth , suburbs like Mill Park , Walmer , and Summerstrand continues to show good activity . As is the case across the country , properties priced below R3 million moves quickly .

While it ’ s impossible to predict what will happen one the next year , a few key trends seem to be emerging . There is a definite demand for sectional title properties within the major growth nodes - particularly for mixed-use precincts that promise to cut down travel time and increase convenience . Estate living is also on the rose , with a growing number of lifestyle estates including more sectional title properties rather than freehold homes . Estates within close proximity to cities remain in high demand , with many offer-

14 DECEMBER 2017 / JANUARY 2018 SA Real Estate Investor Magazine