According to the latest announcement made by the Monetary Policy Committee (MPC) of the Reserve Bank, debt holders face higher home loan repayments. The repo rate climbs by another 75 basis points to 5.5% per annum, ultimately pushing the prime lending rate to 9%.
Yet despite the constant rising of inflation and interest rate hikes in South Africa, the luxury property market remains somewhat ‘immune’ to current economic pressures and financial aftermath of Covid-19.
Luxury properties are those priced at approximately R3 million and above
According to BusinessTech, in 2021 Lightstone Property data recorded 984 homes sold in South Africa – the highest number of homes valuing over R10 million sold in recent years.
This is due to international buyers who are significant contributors to the activity in the highest-priced property range in South Africa, particularly in Cape Town’s Atlantic Seaboard, where an estimated 20% of all luxury property transactions are sales to semigrants and foreign buyers.
Grant Smee, MD of luxury property specialists Frankie Bells – A division of Only Realty Property Group – says “Foreign buyers enjoy South Africa for its natural beauty and generally temperate winter climate in comparison to the snowy Northern Hemisphere. They are in search of homes that boast exceptional views, high-end design, extensive security measures and proximity to breathtaking attractions.”
The Western Cape currently stands at the top of South Africa’s luxury property market list, housing some of the most expensive real estate in the country, including a R172.5 million house for sale in Clifton.
“Cape Town is currently the city of choice for buyers in all price brackets and the luxury property segment is no exception. A lack of supply in the most desirable neighbourhoods has driven up prices, with wealthy buyers willing to sacrifice square footage for ocean views and proximity to beaches,” says Smee.
While the highest demand for luxury property is in Cape Town, particularly in security estates and educational nodes encompassing the province’s top government and private schools. Sought-after luxury homes across the province include Franschhoek, Hermanus, Stellenbosch, Knysna and Plettenberg Bay.
Picture: Tyson Property