Highest Residential Prices across South Africa (The Bugle)

The high end of residential real estate is where I have focused on for the past twenty years. Definitions of “high-end” vary depending on where in the country you are active in. Along the Atlantic Seaboard in Cape Town, this category is significantly higher than in most other areas. Transactions ranging from R10m, for an average V&A Waterfront apartment, to R110m for a penthouse at the One and Only Hotel tends to define this category in Cape Town. As I am fascinated by what drives the property market and how value is attributed to various real estate sectors, I cannot resist analyzing transfer data across various suburbs and estates. Nettleton Road in Clifton is a remarkable road with Stefan Antoni designer homes perched on top of granite rocks looking out over the cold Atlantic. It is not uncommon to see a home advertised in Nettleton Road for over R100m. A transfer report on all registered transactions within Nettleton Road since 1 January 2010 however indicates only 9 transactions ranging in price from a “pedestrian” R11,5m to a more impressive R60m. These homes are not situated on large sites. The site sizes of the sample ranged from a tiny 593 sqm (small even by our local Palm Lakes benchmark) to a more meaningful 1,912 sqm. Selling prices per sqm of land ranged from R15,416/sqm to R84,317/sqm. Ouch! Imagine paying almost R90,000/sqm of land for a freehold property. 

As high as these registered transfer prices are I could not find transfers registered over R100m. OK, so what about the V&A Waterfront? The 500 plus high-end apartments that make up this exclusive suburb have equally impressive advertised prices. Again analyzing all registered transfers over R10m from 1^st January 2010 within the V&A Waterfront suburb, I could pick up 36 transactions. The highest registration during this four year period was R63m for a 1,050 sqm penthouse at the One and Only. For R10m you can expect to buy a 250 sqm apartment at around R40,000/sqm. The highest rate per sqm in the sample analyzed was R78,431/sqm for a 255 sqm apartment that sold at R20m. 

Expanding the research across the entire Clifton suburb and restricting the research to the four year period from 1^st January 2010, I picked up on a “wow” transaction. Over this period Clifton delivered 81 transfers over R10m – that has to be impressive by any standard. At the top of the list is a sale recorded at R198,354,300 for a 834 sqm apartment at The Clifton situated at 56 Victoria Drive. The accompanying garage of 33 sqm would push the total size to 867 sqm and the resultant price/sqm to R228,782.35.  

Having now understood what the Atlantic top end actually means how do we in KZN compare. Zimbali Coastal Resort provides a benchmark for our local high-end residential real estate. Applying the same methodology to Zimbali we see that there were 21 transfers over R10m in Zimbali for freehold homes (excluding vacant land transactions and sectional title units). Of these 19 were between R10m – R15m. Two were at R20m. This gives sellers some insight into how infrequently homes above R15m trade. The most inactive price bracket in Zimbali is currently the R15m plus range and yet it is in this bracket that a large amount of the current listed stock sits. Once you consider stock in terms of years on hand, we have over 20 years of stock on hand for the R15m to R35m price bracket. Comparing Zimbali to the Atlantic Seaboard opportunities it appears that we are offering incredible value for money, which buyers should enjoy as long as it lasts.

Published in The Bugle, 26 Mar 2014, Author: Andreas Wassenaar