BetterBond has reported a 15.23% increase in bond approvals for homes priced +R3m year-on-year, now making up 10% of all bonds. From foreign investment and returning expats to lifestyle-driven relocations, Cape Town leads with prices having climbed 5.1% in 2024 according to Knight Frank, with demand also rising in Gauteng’s estates and KwaZulu-Natal’s coastal areas.

The surge in demand is reflected in the price inflation of luxury homes says Bradd Bendall, BetterBond’s National Head of Sales, especially in the Western Cape.

“As reported in the recently released Knight Frank Wealth Report, house prices of prime residences in Cape Town increased by 5.1% in 2024, ranking it 32nd globally. The continent is fast establishing itself as a hub for wealth creation, and as more people fall within the high-net-worth individuals (HNWI) category, we can look forward to greater sales activity within this segment of the market. Prices will continue to rise as demand surpasses supply.”

Cape Town is well-known for its luxury properties with homes along the Atlantic Seaboard easily selling for upwards of R100 million. In 2024, a home in Camps Bay was on the market for R700 million, making it the most expensive home to ever be listed in South Africa.

As reported by Lightstone, the city also boasts the highest percentage of sales concluded within a month of a home being listed. “This comparatively short time on the market underscores the growing demand for homes in many parts of the city,” says Bendall. Cape Town’s property prices have surpassed those of Johannesburg since 2021. It is also the city where the average sales price is closest to the listing price, he adds. The region is home to the second highest number of HNWI, with many choosing to live in Paarl, Franschhoek and Stellenbosch in the nearby Cape Winelands.

He adds that there is also a strong demand for high-end homes in KwaZulu-Natal, Gauteng, and parts of the Northern Cape. “In Gauteng, the country’s economic epicentre, there is a considerable demand for homes in upmarket lifestyle estates. In Blair Atholl Golf and Equestrian Estate, for example, homes are listed for up to R67 million. According to Property 24, the average sales price for homes in this estate offering equestrian facilities, walking trails and access to a championship golf course, is R15.4 million. Well-established suburbs such as Sandhurst also get the nod. Offering stately homes on expansive grounds, Sandhurst has properties listed for up to R150 million for a seven-bedroom home.”

KwaZulu-Natal has plenty to offer, from pristine beaches to unsurpassed natural beauty. Recent investments in the area, including the R2 billion Club Med South Africa resort development, has bolstered the appeal of this coastal province. “We are seeing buyers relocating from nearby Gauteng to move to a lifestyle estate that offers sea views, top-tier amenities and family-friendly activities,” says Bendall. Umhlanga is one of the popular suburbs for foreign and local buyers, with a home in La Lucia currently listed for R115 million.

“Buyers of luxury properties are less affected by changes in the prime lending rate. As affordability is not as much of a consideration as for buyers at the lower end of the market, they are largely motivated by their lifestyle choice or investment portfolio,” adds Bendall.

With signs pointing to a strong recovery of the property market as well as an accommodating rates environment, BetterBond expects the demand for high-end homes to intensify, and this in turn will drive up luxury house prices. “South Africa offers a comparatively stable investment haven as well, given the prevailing geo-political tensions playing out in other parts of the world.”

This combined with an accommodative lending environment, with further cuts in the prime lending rate expected in upcoming months, should see the luxury market continuing to perform well.