Inside SA’s R20m-plus trophy homes
Temperature-controlled wine cellars, private elevators, cinemas, glass-walled garages and automated ‘pods’ for easy vehicle access ... these are just some of the must haves in the country’s ultra-high-end housing market
By Joan Muller
Feature Business Live
Date published 09 March 2023
No fewer than 546 homes with price tags of more than R10m were sold in Cape Town in the 12 months toend-February. That’s more than three times the 160 sales of R10m-plus recorded in Joburg over the same period, latest deeds office figures show. In addition, 120 homes changed hands for more than R20m in the Mother City in the past year. Compare that with only nine in Joburg, and it’s clear just how pronounced Cape Town’s lead as South Africa’s prime real estate destination has become. Seeff Property Group chair Samuel Seeff says the Cape Town suburbs that have recorded the most R20m-plus sales are Constantia, Camps Bay/Bakoven, Fresnaye, V&A Waterfront/Mouille Point, Llandudno, Bantry Bay, Clifton and Bishopscourt.
Joburg areas that are most sought-after among high net worth people include Sandhurst, Hyde Park, Houghton and golf and lifestyle estate Steyn City. The last-mentioned holds the record for the highest sectional title price achieved post-Covid in Gauteng, after a penthouse was sold last year for R33m. The resurgence of Cape Town’s upscale housing market is confirmed by British-based real estate group Knight Frank’s newly released “Wealth Report 2023”. Cape Town moved up 63 places on Knight Frank’s prime international residential index, from 94th to 31stspot in 2022, after notching up price growth of 7.3%. That’s up from a 0.2% drop in 2021. The index tracks the price performance in top-end housing markets in 100 city, sun and ski locations across the globe. According to the report, the post-pandemic housing boom continued into 2022 after a record-breaking 2021, despite rising interest rates and economic uncertainty caused by the war in Ukraine.
Still, price growth in the world’s luxury property hot spots slowed somewhat last year to 5.2%, down from an average 8.4% in 2021. That’s up on the 1.6% average annual increase recorded by the index in the decade to end-2019. Dubai, which offers foreign buyers various residency and citizenship incentives, cemented its status as a prime global hub for the super-rich for the second year in a row. The United Arab Emirates state topped the charts last year, recording a 44.2% acceleration in property prices. That’s similar to the increase achieved in the previous year, after seven years of negative growth.
Last year’s biggest losers were Wellington (-24%) and Auckland (-19%) in New Zealand, which had outperformed during the pandemic.
Referring to Cape Town’s rebound, Knight Frank South Africa COO Nick Gaertner says the city has managed to separate itself steadily from other regions in the country, establishing itself as a “desirable global real estate investment destination”. He adds: “It comes on the back of strong leadership in Cape Town, unlike that in most other cities, which are struggling with poor governance.” Cape Town remains one of the most affordable housing markets in the world.
According to Knight Frank, $1m will buy you 218m² of prime property in the Mother City, roughly double what you would get for the same price in Dubai or Madrid, and about six times that of London and New York. In Monaco, the world’s most expensive residential market, $1m will buy you a mere 17m².
Cape Town’s rising prominence among trophy-home buyers means there’s no better time to be an estate agent in the city. At an average 7% commission rate, typically split 50/50 with their employer, estate agents can bag roughly R350,000 for each R10m property sold. That’s no small change for an occupation that in the past was often seen as a mere side hustle. Adrian Mauerberger, one of Seeff’s top Atlantic seaboard agents, confirms that the market has experienced an unprecedented sales surge over the past two years. “In fact, it’s been the best two years of my 20-yearreal estate career,” he tells the FM. Late last year, Mauerberger, together with his life and business partner Bryan Ginsburg, set a record forsectional title prices on a rand/m² basis, when they clinched the sale of a 398m² seafront apartment in Bantry Bay to a German buyer for R72m.
The deal — for one of only eight units in Aurum Presidential Residences on Victoria Road — was concludedat a previously unheard-of R180,905/m². Sales volumes had reached record highs in 2021, but Mauerberger last year sold 60% more luxuryapartments (those typically in the R5m to R60m-plus bracket) than the year before. He says the earning potential is now substantial and virtually uncapped.
“The reality is that real estate has become an incredibly lucrative career. But it comes with a lot of dedication, hard slogging and specialist knowledge,’’ he adds.
Cape Town’s housing resurgence has offered estate agents a welcome reprieve from the 2019/2020 slump, when prices and volumes in upper-end suburbs dropped by 20%-30%. “In 2019, the country was going into a recession, so the market was already weak,” says Mauerberger. “Then Covid hit, and sales dried up overnight.’’ The increased demand among well-heeled buyers doesn’t mean overpriced properties are being snapped up, however. “Today’s buyers, especially at the upper end of the market, are well informed and know exactly how muchbang they can get for their buck in any area. They won’t be taken for fools,” he says.
“Today’s buyers, especially at the upper end of the market, are well informed and know exactly howmuch bang they can get for their buck in any area. They won’t be taken for fools ” - Adrian Mauerberger
Besides competitive pricing, what else are discerning buyers looking for when spending R20m or more on a trophy home?
Unsurprisingly, a full backup power system to guarantee uninterrupted electricity supply has become anon-negotiable, especially among foreigners. “Overseas buyers are not prepared to suffer load-shedding — ever,” says Mauerberger. Basil Moraitis, Pam Golding Properties regional head in the Western Cape, echoes the view. Apart from the obvious requirements such as the right location, privacy and unobstructed ocean and/or mountain views, he says, high-end buyers increasingly want complete energy independence from the grid. “Water storage tanks are also becoming more important,” he adds.
Wealthy buyers are also more frequently looking for boreholes with water filtration systems, says Karryn Cartoulis, independent sales associate for Re/Max Living. She clinched her own record-breaking deal last year, when she sold Obsidian, a modernist concrete, granite and glass structure on Clifton’s Kloof Road, toa European family for close to R160m. Cartoulis says other features that buyers of trophy homes typically look for include wall space to display art collections, temperature-controlled wine cellars, walk-in fridges, private elevators, surround-sound music systems and garaging for at least three vehicles — preferably glass-encased, to show off flashy sports cars. Of course, purchasing a property linked to a prestigious architect and design firm also adds a certain cachet. Cartoulis refers to Stefan Antoni Olmesdahl Truen Architects (Saota), GSquared, Wynand Wilsenach, Benjamin Kaplowitz, Mike Hackner, Jenny Mills, Jane Visser, StudioMas and Peerutin Karol, among others. Kitchen fittings and appliances that have become de rigueur include Miele, Gaggenau, Bulthaup, Valcucine, Assirelli and Eurocasa. Other in-demand features, according to Dogon Group Properties MD Alexa Horne, include controlled water streams in pools to allow for “against the current” swimming training, bespoke man caves with dedicated whisky bars, high-end cinema and audio installations, rotating garage floors and automated “pods” to allow easy entry into and exit from tight parking locales.
Horne adds that bespoke design and careful craftsmanship are huge draw cards for well-heeled buyers. Homes with individual flair, character and original touches in prime positions are also highly desirable. Architecture that’s in harmony with Cape Town’s natural environment, incorporating sustainable design elements of reclaimed timber, stone, steel and glass, are very much on-trend, says Horne. Malan Vorster, Del Fante Design and Gerd Weideman are highly regarded on this count.
While Cape Town still holds the record for the highest sale price reached in South Africa — Dogon fetched a staggering R290m in 2016, when it sold a Bantry Bay residence to a German couple — KwaZulu-Natal may soon take over the Western Cape’s title. IFA Hotels & Resorts, the developer of Zimbali Coastal Resort on the province’s north coast, has launched Tatali (“cascades”, in Arabic), a new ultra-opulent development at neighbouring Zimbali Lakes. Co-designed by Saota and Craft of Architecture, Tatali will be anchored by the 3,000m² Oculus Mansion, which comes at a staggering R350m. The property will be located on the highest sea-facing point in the estate, offering uninterrupted views of the ocean, golf course and lake. IFA Hotels & Resorts CEO Werner Burger says Tatali presents “bespoke, private and secure residential offerings for discerning buyers who demand a world-class standard of sophistication and superior service”.