Technology drives luxury residential real estate buying trends
Technology has unquestionably become one of this decade’s most significant luxury residential real estate trend drivers, offering a world of freedom to High-Net-Worth (HNW) individuals who were previously tethered to career-specific locations.
That’s according to High Street Auctions Founding Partner and Lead Auctioneer Joff van Reenen, who believes business will never fully revert to the traditional corporate employment framework that was in place prior to the pandemic.
“With staff working remotely trade and commerce continued; the markets didn’t collapse and the private sector didn’t implode. Even the world’s largest multinationals functioned with ease from thousands of locations because technology linked their employees to each other and to their clients.
“At the height of the pandemic in 2020, not being office-bound triggered a global migration trend away from major metropolitan areas – a movement that grew in momentum last year and still shows no sign of slowing.
“HNW individuals are increasingly making real estate investments based on lifestyle choices rather than location dictations, because they know that as long as there’s a digital connection, they’re in business.”
The 2022 Douglas Elliman and Knight Frank Wealth Report supports that with data showing large sums of private capital currently flowing into real estate, and private investors increasing property holdings by 52% in 2021.
Van Reenen says lifestyle properties in the bush and near the coast have been the biggest drawcards in South Africa in recent years, among local and international investors alike.
“Every luxury game lodge we’ve auctioned since the beginning of 2020 has attracted widespread interest and been snapped up after very competitive bidding.
“Changing technology has also been instrumental to this process, because High Street introduced live-stream virtual auctions shortly after lockdown began in 2020 and as a result international buyers have been able to watch sales and bid digitally in real time. In fact, the first bush lodge we auctioned virtually was bought by sight-unseen by an international buyer on the strength of a 3D virtual tour of the property.”
Lightstone data reveals that in 2021 foreign buyers purchased 199 properties in Limpopo province, where many of the country’s game lodges are located. In 2020 when the Deeds Office was shut for several months, the number of foreign buyers in the province was still 159.
And according to Knight Frank’s Prime International Residential Index (PIRI 100), the average value of luxury residential property increased by 8.4% last year, which represents the highest annual increase since this index started tracking in 2008.
Van Reenen says it’s steep appreciation in this bracket coupled with favourable foreign exchange rates that are making properties such as bush lodges and lifestyle farms in South Africa such attractive investment propositions for foreign buyers.
“They are, however, facing stiff competition from the local semigration market. As many local buyers – especially from Gauteng – are seeking rural lifestyle properties in the Western Cape and the northern bushveld regions of the country.
“Our auction buyers in this segment are pretty evenly split between foreign and local purchasers. On our upcoming auction on June 29th there are three properties in particular that are attracting a lot of interest.”
Van Reenen says the first is a lifestyle farm in the Robertson district in the Western Cape, an easily commutable 160km from Cape Town International Airport, while the other two are located in the highly sought after Mabula Private Game Reserve in Bela Bela, Limpopo.
“The two Mabula lodges are perfect family retreats as primary or co-primary dwellings for HNW individuals, set in very secure surrounds.
The first, Tidimalo, is a three-bedroom, three-bathroom luxury lodge with 180-degree views across a sweeping valley. Glass frontages fold back to a wide viewing deck that allows for spectacular indoor-outdoor living that overlooks a private rock pool. Air-conditioning, all furnishings, a wine cellar and a game viewing Land Rover complete this lifestyle purchase.
“The second lodge, the House on the Rock, is suited to extended families that seek more privacy. Perched atop a hillside with outstanding views over the reserve, the main lodge consists of the public living spaces and master suite, with expansive viewing decks. Three further en-suite bedrooms are located in chalets adjacent to the main lodge. The fully air-conditioned and furnished luxury dwelling is also being sold with a game viewing vehicle.”
Van Reenen says the lifestyle farm in the Langeberg district near Robertson in the Western Cape is more suited to semigrants seeking a complete lifestyle change.
“The gorgeous 309-hectare property comprises two family homes as well as a separate flat, with the main house a gorgeous four-bedroom Victorian trimmed with broekie lace.
“The new owners would be buying a lifestyle with this property, in particular a new saffron farming development due to be harvested for the first time this year.”
“Saffron is the world’s most expensive spice and according to a report done by Grand View Research, the international saffron market cap in 2019 was R13.4 billion and it’s expected to grow to R22.4 billion by 2027.
“Saffron is high in value, low in infrastructure, and depending on the quality, 1kg could fetch as much as R250 000.”
Van Reenen says the saffron production on this farm is still on a small scale with about 2 000 bulbs planted to test the climate. Production will expand annually, and it would be possible to extend this new crop to 6ha in six years. Grapes, apples, peaches, plums and lucerne are also planted on the farm, which has its own borehole, three dams and water rights from a mountain stream.
The hybrid auction will be both live at the Grosvenor Room and Marquee at the Bryanston Country Club, 63 Bryanston Drive in Bryanston, Johannesburg, and virtually live-streamed across the world via High Street’s website, its social media channels and the High Street Auctions app on June 29th.
Bids will be accepted from the floor, by telephone, on the High Street app and via any other digital streams prescribed by the auctioneer prior to the sale. For more information on the auction, visit www.highstreetauctions.com.