Cape Town Has The 2nd Fastest Growing Luxury Property Market Globally
Knight Frank has recently released its 2018 Wealth Report with its imperative insight into the global real estate economy.
Of relevance, Cape Town hosts the second fastest growing luxury residential market globally, showing a growth of 19.9% between 2016 and 2017 (FNB Property Price Barometer for the Atlantic Seaboard, luxury market). The only city to outperform this was Guangzhou, China with a growth of 27%.
Furthermore, the Wealth Report explores the most important factors influencing the global population of ultra-high net-worth individuals (UHNWIs). Data collated from five hundred of the world’s leading private bankers and wealth advisors, among whom represent over 50,000 clients worth a combined US$3 trillion, revealed noticeable trends in investment behaviour. The second largest rise in investment expenditure was seen in property, with private capital fuelling global property deals worth over US$1 billion (R11.75 billion) in 2017 alone. In addition to this growth, over a period of the last 5 years, there has been a 300% increase in the number of US$1 billion plus deals per annum. The majority of these purchases were made by companies owned by private individuals, noting the influence and importance the global population of the ultra-wealthy has on the markets.
Asia’s continued economic growth and strength has reflected in this market too, accounting for just less than two thirds of the demand for the global luxury property. One of the most noteworthy purchases must be the US$5.1 billion purchase of The Center office building in Hong Kong, bought by a consortium of domestic investors.
Property investment, as a global commodity, continues to flourish, with the demand by private investors for property outside of their domestic market remaining strong. With relevance to Africa, Mauritius remains a popular choice as it maintains its reputation of being a relativity safe, business-friendly country boasting lower tax rates than most other countries in Africa.
Managing Director of Knight Frank South Africa, Susan Turner comments “In Cape Town there have been several ultra-high-net-worth properties sold during the past 12 months, setting record prices. The number of properties sold in this segment has however slowed, we believe this to be largely due to the ongoing drought which is affecting Cape Town and the political instability seen during 2017.”