Constantiaberg estate market retains its investment value and offers a window of opportunity

Constantiaberg estate market retains its investment value and offers a window of opportunity

DESIGNER LIFESTYLE: This multi-level designer home in Stonehurst Mountain Estate is fitted with top-of-the-range appliances, as well as solar panels, heat pumps for two geysers and borehole water.

Constantiaberg’s well-established estates have always been regarded as prime residential addresses – property that consistently offers solid investment value – and this exclusive market’s strength and resilience were yet again reaffirmed by its exuberant resurgence in the first quarter of 2018.

This is according to Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, who says: “The market wasn’t completely immune to the backlash of the flailing economy and political turmoil that crushed lesser markets and subdued most others last year, but it held its ground and bounced back with a vigour that saw median prices skyrocket in the most sought after estates.

“Lightstone data reveals that Stonehurst’s median price jump by 32%, from R4.05 million at the end of 2017 to R5.33m by mid-April. During the same period, Steenberg Golf Estate and Silvertree’s median prices grew by 27.2% and 17.5% respectively with the former increasing from R12.5m to R15.9m and the latter from R7.87m to R9.25m.”

“Although no market is an island,” says Geffen, “The Constantiaberg estate sector has always marched to its own drum, largely buffered from most negative market shifts. But last year it was unable to completely deflect the impact of two factors – the decline in semigration and progressively cautious investor sentiment.”

David Burger, estate specialist in the area for the group says that demand remained strong with consistent sales volumes in many estates, but most of the market activity last year was in the mid-level price bands.

“Homes priced under R10m continued to sell well but we saw a slowing of sales at the upper end of the market with properties taking longer to sell and often for considerably less than the listing prices.

“According to Propstats data, in 2017 only one home was sold for more than R10m at Stonehurst with the lowest sale price being R3m and, although two sales at Steenberg were in the upper price band all other properties were priced between R7.8m and R9.49m. Silvertree’s lowest and highest selling prices last year were R6.3m and R7.9m.

“However, so far this year, both Stonehurst and Steenberg have already achieved sales in excess of R10m and, with a significantly higher sale price range of R8m and R9.6m, Silvertree is poised to breach the R10m mark for the first time in two years.”

Burger says that although the current market revival is largely sentiment-driven, there are a number of encouraging tangible factors that further inspire cautious optimism for ongoing market recovery in 2018 if political stability prevails.

“One of the most auspicious is the surge in business chief executive’s confidence in South Africa since Cyril Ramaphosa’s appointment in December. By the end of the first quarter of this year, The Merchantec CEO Confidence Index had spiked by 56.18%, from 38.4 points in the fourth quarter of 2017 to 60 points, reaching levels last seen in 2012. It’s also the first time the index has moved above the neutral 50 point mark since the first quarter of 2017.”

While these promising upticks bode well for the market and current owners, they are also an indication of a limited window of opportunity for new investors to take advantage of the current buyers’ market.

“There are still a number of exceptional estate homes on the market for under R10m,” says Burger, “but these homes will become increasingly scarce as the market continues to strengthen this year. Security followed by lifestyle remain the top priorities for most buyers and Constantiaberg estates tick all these boxes”

The majority of buyers are local families, South Africans returning home after working abroad and foreign buyers wanting a secure lifestyle, but Burger says that an increasing number of empty nesters are downscaling from large family homes in the area as well as astute investors buying their future retirement homes at today’s prices.

Other key drawcards include proximity to several of the city’s top schools and an array of excellent amenities that are virtually on their doorsteps. There are a number of secure office parks in the area as well and a Medicross clinic.

Burger says that water-wise buyers are also attracted to these properties as most modern estate homes are fitted with water-wise features, adding that some estates like Steenberg and Stonehurst have independent water supplies while most other estates allow private boreholes.