Cape Town far outpaces Joburg in high-end property sales as the rich ‘vote with their wallets’

Even Stellenbosch beat Johannesburg with 10 properties sold for more than R20 million at a total value of R330 million.

• An analysis by Seeff Property Group shows 241% more properties were sold for more than R10 million in Cape Town than in Johannesburg in 2022.
• Better service delivery and confidence in local governance are likely the main reasons, says Samuel Seeff, chair of Seeff Property Group.
• While the total value of the seven sales above R20 million in Johannesburg was R193 million, Cape Town experienced a record number of sales above in this category, namely 120 with a total value of R3.7 billion.
• For more financial news, go to the News24 Business front page.

Comparing high-end residential property sales in Cape Town and Johannesburg indicates that the wealthy are “voting with their wallets” in favour of the Mother City, according to Samuel Seeff, chair of Seeff Property Group.

In his view, better service delivery and confidence in local governance are likely the main reasons. Foreign buyers also favour Cape Town. For example, in 2022, about 30% of all sales along the Atlantic Seaboard were to foreign buyers.

An analysis by Seeff of deeds office data provided by property analytics firm Lightstone shows 241% more properties were sold for more than R10 million in Cape Town than in Johannesburg in 2022.

If one breaks the categories down even further, 235% more properties were sold for more than R20 million in Cape Town, 145% more in the R10 million to R20 million price band, and 61% more in the R5 million to R10 million band.

While the total value of the seven sales above R20 million in Johannesburg was R193 million, Cape Town experienced a record number of sales above in this category, namely 120 with a total value of R3.7 billion. International buyers made up about 30% of sales along the Atlantic Seaboard.

Even Stellenbosch beat Johannesburg with ten properties sold for more than R20 million, at a total value of R330 million.

“There is a clear flight of property wealth to the Western Cape … while upper price limits have stagnated in the Johannesburg area,” says Seeff. “The wealthy are clearly ‘voting with their wallets’.”

Yet, he points out that even in Cape Town – as in Johannesburg – there has been “slow movement” in the price band above R10 million for the past ten years.

“Despite the record number of sales above R20 million in 2022 across the Cape Town Metro, upper price limits have remained more or less the same as five years ago,” he says. “Only a handful of sales were above R50 million, and the top-end price ceiling has hardly moved since around 2015.”

The highest price obtained in Johannesburg was R50 million for a property in Steyn City. The highest price achieved in Sandhurst was R30 million. In Cape Town, by comparison, R125 million, R74 million, and R72 million were achieved for properties in Bantry Bay, on Cape Town’s Atlantic Seaboard, and R100 million for a property in Constantia.

Ashleigh Müller, managing director of Ask Ash property brokerage, has noticed that, due to stock moving quickly in certain price brackets, some buyers are submitting signed offers and paying deposits without even having seen the property in person.

Global real estate services provider, Savills, has ranked Cape Town fifth on its World Cities Prime Residential Index which looks at factors such as prime capital value growth forecast for 2023 compared with capital growth value in 2022. Cape Town, with capital value growth of 5.1% in 2022, is forecast to enjoy capital value growth between 2% and 3.9% in 2023.

Basil Moraitis, regional head in the Western Cape for Pam Golding Properties, which is Savills’ residential real estate partner in Africa, says of the 30 prime global cities cited in the Savills Index, Cape Town is the most affordable market for prime residential property with a capital value of just $260 per square foot.