After two years of Covid being the main driving force behind property investment decisions, the war in Ukraine has added a new dynamic which is now also fuelling the increase in foreign investors in Cape Town’s upmarket Constantiaberg region where international sales have doubled in recent months.
“For many years now, our local and international buyer split in Constantia has hovered around 80/20 respectively, regardless of the economic or political climate,” say Joanna Thomas and Rouvaun McKirby, Area Specialists for Lew Geffen Sotheby’s International Realty.
“However, there has been a notable shift during the past year, with 40% of our most recent 25 sales being to foreign buyers and the most common reasons cited have been more flexible working options, ongoing Covid restrictions in Europe and, most recently, concern about the war in Ukraine.”
According to Thomas and McKirby, the majority of their recent sales were to buyers from Austria, the United Kingdom, Germany, Switzerland, Netherlands and the USA.
“Previously, many of our buyers from these countries were swallows looking to escape the European winter and enjoy our laidback summer lifestyle, but it seems that now most want to make SA their permanent base and work from here.
“The majority have the flexibility to earn an overseas currency while basing themselves in Cape Town, with some of these buyers being ex-pats who have lived abroad for more than 20 years and are now returning intending to travel between countries when necessary for work.”
The team adds that most of these buyers are investing in the luxury market, buying houses in the R10 million-plus price band although there are also others looking to purchase more compact, lock-up-and-go units for investment or retirement purposes.
Constantia has currently *49 new property listings according to Property24 Trends Data, with the average asking price for the area being R9.999 million. The average sale price per erf for 2021 was about R7.25 million while Section Scheme Units for the same period is about R8.9 million.
The latest residential listings on Property24 show that four-bedroom homes are most widely available, at an average list price of R12.75 million. Sellers in the area fall within the 50-64-years (40%), while 50% of buyers also fall within the 36-49 years age group.
Click here to see all the sale and listing price trends in Constantia
According to Lightstone data, the highest ever median house price has already been achieved this year in Greater Constantia when it reached R15.18 million by the end of March, which is notably higher than the previous high of R12.15 million in 2017.
The estate sector in this area has also seen a rise in foreign investor interest and, on the back of the busiest December they have experienced in almost two decades, Secure Estate Specialists for the group, Stephan Thomas and David Burger, also contribute it to two key factors: more flexible working conditions and lifestyle.
“Sotheby’s International Realty research has shown that at least 40% of the global workforce is now ‘location independent’ and the opportunity to live in harmony with the stunning natural environment offered by estates like Stonehurst, High Constantia and Silwersteen, is fuelling keen local and foreign interest.
“Most buyers in our area are buying into the Cape Town lifestyle and the close proximity to a host of scenic amenities such as golf courses, mountain bike and hiking trails, beaches and sailing.”
Thomas adds that he recently dealt with a buyer from Mauritius who considered the possibility of negative growth (in US Dollar terms) as an acceptable risk considering the outstanding lifestyle that is achievable.
“The region not only offers an idyllic and tranquil country lifestyle in scenic surrounds it also boasts first-rate services, infrastructure and amenities as well as excellent schooling and medical facilities and the convenience of being in close proximity to the airport and Cape Town’s CBD.
“And, this of course ensures that the area continues to be an excellent investment and one of the most resilient markets in the country.”
However, over and above the lifestyle the region offers, Thomas and Burger also believe that another compelling drawcard is the fact that the Western Cape is perceived to enjoy the best governance in the country with higher standards maintained here than in any other province.
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*Property24 Listings Data Disclaimer: The trends detailed in this article are based on Property24 listings, current at the time of publishing, and property transfer data supplied by Deeds offices, which typically take 3-4 months to reflect. Suburbs are listed according to Property24's geographical database. In some areas this will include both commercial and residential properties. The age demographic data of buyers, sellers and stable owners is determined over a six-month period. These Property Values should not be used as a substitute for independent professional advice and is subject to Property24.com Terms and Conditions.
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