Cape Town ranks 14 out of 100 cities worldwide and saw an 8.3% rise in property prices
CAPE Town is the shining star of Africa’s luxury residential market, with the 2017 KnightFrank Wealth Report highlighting its position at the top end of the Prime International Residential Index.
Listed in 14th place out of 100 cities, Cape Town saw an 8.3% increase in prices from December 2015 to December last year. In a global economy where the value of the world’s leading prime residential markets recorded slower growth, this shows that the city is still hot property.
On average, global values rose by 1.4% last year, compared with 1.8% in 2015, Kate Everett-Allen, head of international residential research at Knight Frank, said in the report.
However, the Prime International Residential Index also reveals a “huge gap” of 49 percentage points between the top and bottom ranking, up from 45 in 2015.
The top tier is dominated by cities in China, New Zealand, Canada and Australia, while oil-dependent markets, such as Moscow and Lagos, “bring up the rear”.
While Cape Town finished in the top 15, the next best-performing South African – and African – city was Johannesburg in 36th place, with a 2.2% price increase.
“A breakdown of the Prime International Residential Index by world region, shows that Australasia (+11.4%), Asia (+5.1%) and North America (+4.5%) are the key engines of growth. Europe and the Caribbean sit firmly ‘mid table’, recording moderate shifts of 0.5% and -0.3% respectively.
“Latin America (-2.7%), the Middle East (-3.3%), Africa (-3.4%) and Russia/ CIS (- 5.5%) all recorded negative growth, due to weak currencies, slowing economies, rising inflation, low oil prices and growing political risk,” Everett-Allen said.
The wealth report identified seven hotspots that presented exciting opportunities for private property investors. These are: Miami, US. Bengaluru, India. Berlin, Germany. Amsterdam, The Netherlands. Mexico City, Mexico. Austin, US. Melbourne, Australia. Although Cape Town did not make that list, the report predicted the city would outperform others in terms of technology and creative industries. For, situated on the slopes of Table Mountain, Cape Town was the last remaining inner city area available for redevelopment, said Anne Porter, from Knight Frank South Africa.
She said it also benefited from an Urban Development Tax Incentive scheme that encouraged urban renewal through private sector investment.”
The wealth report also highlighted where ultra-high-net-worth individuals were choosing to settle, based on detailed insights from its attitudes survey.
The most important factors for ultra- high- net- worth individuals when choosing where to live included, in order of priority: Lifestyle. Personal security. Safe haven for capital. Education for children. Opportunity for capital appreciation. Health care. Access to transport links. Business reasons. According to the results, 37% of ultra-high-net-worth individuals in Africa would choose to buy a new home outside their country of residence in the next two years, while 39% would buy inside.
The global average was 32% for outside, and 30% for inside.