The property professionals take a closer look at what is really happening in the market, what has influenced it most and what they expect from 2020.
Top-ranked Constantia continues to attract foreign investor interest
The adage that one can’t see the wood for the trees has become a truism for many South Africans now struggling to see beyond the country’s woes, but consistent foreign investor interest in areas like Constantia clearly confirms Cape Town’s enduring appeal and investment potential.
According to Lew Geffen Sotheby’s International Realty’s Upper Constantia team, they haven’t seen a significant drop in the number of foreign buyers and enquiries in their area during the past 18 months.
“There is still considerable interest from swallows and foreign buyers who are, or are looking to become, permanent residents,” says Joanna Thomas, adding that this is largely due to the comparative value the area offers and the quality lifestyle residents enjoy.
“However, we have seen a drop in the number of queries from investment buyers which is probably largely due to diminished and less certain rental returns.”
Partner, Jacques Fourie, confirms that 25% of their sales in 2019 were to foreign nationals and that, interestingly, almost all these buyers either already owned or had recently sold property in the city.
“We are currently concluding sales with two American buyers, one of whom is returning to the country after leaving a few years ago and we’ve also just sold a stunning house to an Austrian investor who has purchased several properties in South Africa which are all run as upmarket guesthouses.”
Ranked in the top 3
Constantia’s enduring appeal and the resilience of its market is evidenced by the fact that it was ranked one of the top three highest valued suburbs in Cape Town in Lightstone’s annual review of the top stats in 2019.
“The market is undeniably tougher than it has been for many years,” says fellow team member Rouvaun McKirby, “but buyers who value what Constantia offers are definitely still out there.
“Last year, due to slower sales and a notable price adjustment, the total market turnover halved from R1.362 billion to R771 million, but we were still able to increase our market share to 24% in 2019, with a turnover in excess of R150m making us one of the top performing teams in the area.”
He adds that in times like these, having the support of an established and respected international brand is invaluable, even to the most seasoned and experienced professionals.
“The global reach and extensive worldwide network of a company that is almost 300 years old means that our listed properties are showcased to the broadest audience possible.”
The benefits of this relationship were borne out again recently when Thomas referred a buyer to the New York office and in turn, New York referred a seller in Constantia for which the team was able to secure a sole mandate.
“There has been much talk recently about the significant increase in the number of properties currently on the market in Constantia with different figures bandied about and the understandable assumption is that it’s largely due to the spike in emigration,” says Thomas.
“However, when one takes a closer look, the true figures aren’t nearly as high as some have suggested and there is also another reason that so many properties have come up for sale – the growing prevalence of sectionalising and subdivision in recent years, especially at the lower end of the market.
“Many property owners have sectionalised or subdivided their land, either raise to capital or reduce costs, so when one of these properties come onto the market, there are actually two dwellings for sale by one seller. There are also home owners who have no intention of leaving the suburb let alone the country; they remain in their homes and sell off the sectionalised portion.
This has contributed significantly to the increased volume of properties on the market, resulting in a glut of properties and a drop in prices.
McKirby adds that although emigration numbers have risen, many Constantia homeowners are also selling in order to downsize; either to minimise costs, or because the kids have left home or for a lower maintenance lifestyle which allows them to travel more easily.
Although only 20 minutes from the city, the historic tree-lined suburb of Constantia boasts not only gracious homes with expansive gardens but also country living in a spectacular setting of lush vineyards, rolling hills and rural farmland, set against the backdrop of Table Mountain.
Home to abundant stretches of protected greenbelt, it’s also the ideal location for people who enjoy sports and the great outdoors, offering hikers, cyclists, runners and equestrians myriad trails and breath-taking scenery.
Other significant draw cards include the excellent schools in the area as well as a comparatively lower crime rate than most other areas due to the collaboration of local community volunteer patrollers, the Constantia Valley Information Centre, a camera network and a special response team (SRT) in close collaboration with Wynberg SAPS.
