By Nadya Swart
The Atlantic Seaboard property market, with its enviable views across the ocean and proximity to Cape Town’s city centre has generally been the preserve of higher income earners and wealthy foreign investors. Occasionally, economic wobbles hit prices in the area, creating a window of opportunity for some people to gain entry to the property club that includes owners in Mouille Point, Bantry Bay, Fresnaye, Clifton, Camps Bay and beyond.
FNB’s Residential Property Barometer for May 2020 was awaited with more anticipation than usual as property investors and the like were curious to see what the impact of the Covid-19 lockdown has been on the volumes and prices reflected in the data.
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Prior to South Africa’s national lockdown in March, the FNB House Price Index (HPI) showed that house price appreciation in general slowed to 2.5% y/y in March, the lowest point in almost 9 years – since May 2011. The latest FNB HPI showed that house price appreciation slowed even more drastically to a low of 1.9% y/y in April, the lowest point since the 2.0% y/y in December 2009 – being the lowest point in almost 11 years.Â
With the above in mind, the value of real estate on Cape Town’s Atlantic Seaboard post the country’s national lockdown was looked into, with interesting results.Â
Seeff, a leading estate agency in South Africa, reported that with only four sales for this year, the R20m-plus super luxury Atlantic Seaboard market has fallen to the lowest level in ten years while new listings are up to about 200 in Clifton, Camps Bay, Fresnaye and Bantry Bay.
Samuel Seeff, chairman of the Seeff Property Group, has said that this top end sector is presenting “one of the best buying opportunities in over a decade” as it is heavily influenced by sentiment which is at an all-time low according to the latest RMB/BER Business Confidence Index (BCI).
Ross Levin, managing director for Seeff Atlantic Seaboard and City Bowl, echoed the Seeff chairman’s views, saying that “this is arguably one of the best periods for ‘bargain hunting’ that we have seen in the last decade”. Levin adds that there are now many new listings not seen before while sellers are motivated to take lower offers.
Seeff’s confidence that the time to invest in the Atlantic Seaboard is now is, however, in contradiction with the views expressed by another real estate giant in South Africa on the drop in property prices in this splendid location in Cape Town.Â
Basil Moraitis, Pam Golding Properties area manager for the Atlantic Seaboard, had the following to say to Biznews regarding the current property values: “There is no dispute that property prices on the Atlantic Seaboard reached a multi-year high in 2017 driven by significant demand for the lifestyle offering and the limited supply of properties available for sale at that time. The prices started consolidating and correcting once the drought put a dampener on demand in the latter half of 2017 when the expected rainfall failed to materialise and the amount of homes for sale started to increase.”
In stark contrast to Seeff, Moraitis went on to say that, “despite the price consolidation, we have not seen prices tumble, quite the contrary, we are seeing prices realign with their longer term average growth – removing the abnormal escalation. In our experience, sellers are less inclined to entertain offers which do not align with market trends. At the top-end of the market our experience is that there has been an adjustment of up to 20% from the highs but much of this reduction has already been factored into the current listing prices.”
The Cape Town Cbd needed a bit of a price adjustment. The asking prices pre covid were nowhere close to being reasonable for the sizes. 45k-60k a sqm, madness! Lots of people with cash will start picking off at low prices now
— Mihir M (@MihirM7) June 17, 2020
