Foreigners are paying more than R20 million to demolish bungalows in Cape Town

Despite the fact that tourists have returned home, demand for residential property in Cape Town remains strong, according to Basil Moraitis, regional manager for Pam Golding Properties in the Western Cape.

“We’ve experienced a busy festive trading season on the Atlantic Seaboard with sales to the value of R200 million concluded during December (2022) alone, including high-end sales from R20 million upwards.”

“The lifestyle and natural scenic beauty of Cape Town, particularly the prime Atlantic Seaboard coastal strip between Table Mountain and the Atlantic Ocean, resonates with home buyers around the country and globally.”

According to Moraitis, the post-pandemic market has been mostly driven by first-time homeowners and overseas purchasers searching for a location in the sun during the Northern European winter.

As stock levels approach their lowest point in a decade, investors are returning to the market and looking at hospitality items like Airbnb.

He claims that high-end purchasers of luxury residences priced above R20 million are active in the region.

The Atlantic Seaboard routinely draws a large number of cash purchasers, owing to its outstanding location, world-class properties, and exceptional lifestyle, according to the regional manager, which is not unexpected given its attractiveness to a more well-resourced, affluent buyer group.

Many prominent parts of the Atlantic Seaboard’s topography are located in a narrow bank of steep sites, raising the value of the properties only due to land scarcity.

“It, therefore, follows that the feasibility of developing and selling these properties depends on buyers with cash resources who choose to invest in unique luxury or trophy properties offering spectacular views and the lifestyle that goes with it.”

“This is why this segment has always drawn international and upcountry buyers with cash – and increasingly of late, German buyers.”

“Covid has turbo-charged this trend with people wanting to live their best lives now and in the place that makes them happiest.”

Moraitis stated that overseas purchasers value the area’s houses for their value as well as their engaging lifestyle.

Pam Golding identified the following areas as having received a lot of attention:

• Camps Bay
• Clifton
• Green Point
• Cape Metro
• Constantia

According to the regional manager, demand in Camps Bay houses has also increased.

“The Clifton bungalows are again very much in demand by upcountry buyers looking for a specific and unique lifestyle offering.”

A bungalow’s starting price is presently R20 million for a knockdown. “We have recently sold two such bungalows on Fourth Beach, both of which are to be demolished for new state-of-the-art homes,” said Moraitis.

Aside from enormous stately residences, luxury flats are in high demand, with convenience and closeness to the major city being key selling points.

Green Point is also in high demand, because to its handy position near the core city and major arterial routes in and out of the Atlantic Seaboard, making it a popular choice for families and professionals.

According to Moraitis, the price ranges at Green Point range from roughly R2 million to R20 million, making it easy to enter this market.

Holiday rentals in the Cape Metro have also increased significantly, according to Arno de Wit, Pam Golding Properties’ rentals manager for the area.

“We experienced a boom in holiday rentals over the festive season as local and international visitors returned in their thousands. We concluded several holiday lets over December with five of our most recent including:

• Seven-bedroom villa in Constantia let at R30,000 per night x 17 nights
• Four-bedroom house in Green Point let at R135,000 per month for a three-month lease period
• Four-bedroom villa in Camps Bay let at R25,000 per night x 10 nights
• Four-bedroom villa in Camps Bay let at R15,000 per night x 11 nights
• Three-bedroom house in Silvermist Estate in Hout Bay let at R8,000 per night for seven nights.”

Pam Golding Properties recently let a five-bedroom property in Claremont Upper in Cape Town’s Southern Suburbs for R170,000 per month among long-term rentals, while their highest asking rental currently available is R290,000 per month for a 10-bedroom home in Constantia.