Cape Town property ranked 2nd in the world
As the global economy gains momentum and continues to grow, investors will no doubt be drawn to the Cape Town residential property market, ranked as the second top-performing market in the world.
According to Knight Frank 2018 Wealth Report’s Prime International Residential Index (PIRI 100), Cape Town grew by 19.9% in 2016-2017.
Data provider Wealth-X predicts that the world’s ‘ultra-wealthy’ individuals should increase by 40% by the year 2022, and notes that the super-wealthy are acquiring both secondary properties and passports. In fact, the world’s ultra-high-net-worth individuals spend over US$2.4 billion each year acquiring new citizenship.
Knight Frank South Africa Managing Director, Susan Turner, says “This puts Cape Town’s luxury residential market in a prime position within the investment landscape.” Turner adds that the Western Cape has seen exceptional house price growth over the last five years, especially in the Atlantic Seaboard and City Bowl, where the limited space to build is driving prices. Adding to this demand is a trend of ‘semigration’ of property buyers from other provinces like Gauteng.
The Wealth Report reveals that although clients had increased their exposure to equities over the past year, the second-largest rise was in property, with private capital fuelling global property deals worth over US$1 billion (R11.75 billion) in 2017. And the appetite for private investors to buy overseas remains solid, with one-third of respondents planning to invest outside their domestic market in 2018.
Not only does Cape Town offer a world-renowned business address, it’s consistently ranked as a leading tourism destination. The high quality of life and value for money make the city a sought-after residential address too.
For international investors, the floor space is attractive compared to other popular cities like New York, London, Sydney and Hong Kong. For example, the asking price for a 91 square metre, two-bedroom flat in London city is GBP4.1 million, whereas GBP3.9 million (R65 million) in Cape Town would fetch a five-bedroom homestead with two guest cottages, staff accommodation and stabling for five horses, totalling a whopping 18 926 square metres.
Knight Frank’s analysis of global property markets also explores how much US$1 million can buy in 20 key cities around the world (the table below highlights the top 10). Monaco is the most expensive city in which to buy luxury residential property, with US$1 million buying just 16 square metres of accommodation.
Source: Property 24