After two years of Covid being the main driving force behind property investment decisions, the war in Ukraine has added a new dynamic that is also fuelling the increase in foreign investors in Cape Town’s upmarket Constantiaberg region, where international sales have doubled in recent months.
“For many years now, our local and international buyer split in Constantia has hovered around 80/20 respectively, regardless of the economic or political climate,” said Joanna Thomas and Rouvaun McKirby, area specialists for Lew Geffen Sotheby’s International Realty.
“However, there has been a notable shift during the past year, with 40% of our most recent 25 sales being to foreign buyers, and the most common reasons cited have been more flexible working options, ongoing Covid restrictions in Europe and, most recently, concern about the war in Ukraine.”
According to agents, most of their recent sales were to buyers from Austria, the United Kingdom, Germany, Switzerland, the Netherlands and the US.
“Previously, many of our purchasers from these countries were swallows looking to escape the European winter and enjoy our laid-back summer lifestyle, but it seems that now most want to make SA their permanent base and work from here.
“The majority have the flexibility to earn an overseas currency whilst basing themselves in Cape Town, with some of these buyers being expats who have lived abroad for more than 20 years and are now returning with the intention of travelling between countries when necessary for work.”
The team added that most of these buyers invest in the luxury market, buying houses in the R10 million-plus price band. However, investors are also looking to purchase more compact, lock-up-and-go units for investment or retirement purposes.
According to Lightstone data, the highest ever median house price has already been achieved this year in Greater Constantia when it reached R15.18 million by the end of March, which is notably higher than the previous high of R12.15 million in 2017.
The estate sector in this area has also seen a rise in foreign investor interest and, on the back of the busiest December they have experienced in almost two decades, secure estate specialists for the group, Stephan Thomas and David Burger, also contribute to two key factors: more flexible working conditions and lifestyle.
“Sotheby’s International Realty research has shown that at least 40% of the global workforce is now ‘location independent’ and the opportunity to live in harmony with the stunning natural environment offered by estates like Stonehurst, High Constantia, and Silwersteen is fuelling keen local and foreign interest.
“Most buyers in our area are buying into the Cape Town lifestyle and the proximity to a host of scenic amenities such as golf courses, mountain bike and hiking trails, beaches and sailing.”
Thomas added that he recently dealt with a buyer from Mauritius who considered the possibility of negative growth -in US currency terms – as an acceptable risk considering the lifestyle.
“The region not only offers an idyllic and tranquil country lifestyle in scenic surroundings, but it also boasts first-rate services, infrastructure and amenities, excellent schooling and medical facilities, and the convenience of being in close proximity to the airport and Cape Town’s CBD.
“And, this, of course, ensures that the area continues to be an excellent investment and one of the most resilient markets in the country, said Thomas.
However, over and above the lifestyle the region offers, Thomas and Burger also believe that another compelling drawcard is that the Western Cape is perceived to enjoy the best governance in the country, with higher standards maintained here than in any other province.