The recent publication by the London headquartered Knight Frank Property Group of the 2014 price rises in the areas favoured by global high net worth buyers, has placed Cape Town 8th in the line-up of 30 cities with a 9,2% increase in prices in 2014.
Commenting on this recently, Bill Rawson, Chairman of the Rawson Property Group, said that the report confirms what many Cape Town estate agents (himself included) have been saying for a decade or more, and that is that ultra-high net worth individuals should be seeing Cape Town as a prime investment venue. These UHNIs, said Rawson, generally choose to have 15 – 30% of their assets in residential property and tend to invest worldwide but so far have, in his view, shown too little interest in Cape Town.
“Knight Frank,” said Rawson “have shown us that the UHNI often have as many as six properties worldwide, many of which are in such popular destinations as ski resorts, wine estates, equestrian friendly areas and sailing, boating, swimming and diving regions whether on the coast or at inland waters. Although Cape Town’s 2014 residential property price increases are unlikely to be as high this year, said Rawson, significant value rises probably in the region of 8% will be achieved by the year end.
The price performance of Cape Town property over the last decade or more, said Rawson, has been less prone to fluctuations and in general better than those of other South African cities. Johannesburg, for example, in 2014 achieved an 8.7% rise while in Durban, the average increase was 6.8% - despite far higher rises in certain high density areas such as Berea and the Bluff.
Rawson also pointed out that, according to Knight Frank, Cape Town’s property performance in 2014 put it ahead of many international cities recognised as being safe havens for property investors. Among those with less impressive price rise performances than Cape Town were Los Angeles, Sydney, Washington DC, Tokyo and Seoul.
“What should make Cape Town residential property even more appealing to international buyers”, said Rawson, are the facts that, firstly the environment is particularly beautiful – where else in the world does one have a 1000m mountain and beautiful beaches within 10-15 minutes of at least half the population - and, more importantly the superb value for money obtainable here.”
“The Knight Frank report” said Rawson “comments that US $1 million will buy 21 m2 of floor space in Central London and 17 m2 in Monaco. In Cape Town, the same investment would buy the purchaser 204 m2 in the most prestigious property areas e.g. Constantia, Bishopscourt or Fresnaye. As the values in South Africa are coming off such a low base, the chances of price appreciation are excellent and it is simply illogical that foreign buyers for political or other reasons are still hesitant to become fully involved here. I am however hopeful that, in the coming year the situation will change radically - and there are signs that this is definitely already happening along with big rises in tourists”.
For further information contact the Rawson Property Group on 021 658 7100.
