The once-sleepy fishing village of Hermanus is getting a makeover as the super-rich snap up and spruce up older homes along the scenic Whale Coast where property is becoming scarce.
The famed whale-watching town, along with Plettenberg Bay on the Garden Route, ranks among the top 10 most expensive cities or towns in Africa that are attracting centi-millionaires (people with $100m in investable assets), according to the Centi-Millionaire Report 2023.
The report, compiled by wealth and migration advisers Henley & Partners and global wealth intelligence firm New World Wealth, describes these affluent people as typically being the founders of large multinational companies or heirs to vast family fortunes. “There are only 28,420 centi-millionaires in the world (as at June 2023), making this a very elite club,” read the report, published this week.
“With a growing number of centi-millionaires looking for more meaningful living experiences and understated homes in secluded locations, while maintaining top-notch standards, developers and real estate agents are adapting their offerings to meet this evolving definition of luxurious living,” according to Maximilian Stamm, MD of Engel & Völkers' UK operations.
Andrew Amoils, head of research at New World Wealth, says South Africa has five billionaires and 102 centi-millionaires.
Cape Town took the top spot in the report when it came to the average prices of prime 200m²-400m² apartments in affluent areas at $5,200/m² (about R90,000). Hermanus and Plett ranked joint second at $2,200m² (about R42,000).
Central Sandton made the top 10 at $1,800/m² (about R34,000). Three Moroccan cities — Marrakesh, Tangier and Casablanca — also made the cut.
John Leppan, principal property practitioner at Hermanus Property Sales, said property prices had shot up due to high demand. The town previously attracted mostly retirees and holidaymakers. That changed after the pandemic as younger families, many managing businesses remotely, settled in.
“ Covid allowed people to get off the hamster wheel. It was like a forced sabbatical for families to pause and self-audit. Hermanus has been a recipient of those people ... Our market is predominantly people coming to live here,” said Leppan.
We’ve sold apartments at record prices but a lack of space for development is seeing buyers revamping older homes.
— John Leppan, principal property practitioner at Hermanus Property Sales
The town's attractions include pristine beaches, mountains, well maintained infrastructure, low crime, an abundance of outdoor activities, restaurants and biodiversity.
Leppan said local estate agents were running out of stock. He cited selling a 250m² apartment in central Hermanus for R19m.
“We’ve sold apartments at record prices but a lack of space for development is seeing buyers revamping older homes.
“Old properties are being torn down and rebuilt. We’ve had seafront properties selling for R40m ... the old house gets pulled down and a new one is built. We are seeing old Hermanus redeveloping — the suburbs are upgrading themselves because there is no more vacant land.”
Gordon Shutte, principal of Pam Golding in Knysna and Plettenberg Bay, was not surprised by the centi-millionaire report findings, saying 200m² properties in new developments such as the luxurious Plettenberg Quarter were selling for as much as R48,000/m². Bigger 400m² units had fetched close to R300,000/m² “but these are the exception rather than the norm”.
“The average price is certainly trending up. Last year there were only 12 properties in that range that sold for more than R15m and all were large houses as opposed to apartments.”
He said home buyers were choosing a lifestyle that “comes with luxury and the relative safety of a seaside town”.
“There is constant movement of people into the town, mainly from the larger metros.”
Amoils told the Sunday Times that a significant number of wealthy buyers in Hermanus over the past few years came from Johannesburg and Pretoria.
The Africa Wealth Report 2023 identified some of the most expensive streets and suburbs outside Cape Town as Beachy Head Drive in Plett (R38,000/m²), Eastcliff in Hermanus (R37,000/m²), Lagoon Drive in Umhlanga (R36,000/m²) and Kwaaiwater in Hermanus (R34,000/m²). Plett was listed as having about 350 homes worth more than $1m as of December 2022.
The same report said just over 40% of the 3,700 homes in South Africa valued at more than $1m (as at December 2022) were located in the “prime seven” suburbs of Cape Town — Bantry Bay, Bishopscourt, Camps Bay, Clifton, Constantia, Fresnaye and Llandudno.
Denise Dogon, founder of Double.D Property Consultants, said Cape Town was a perfect city to attract international millionaires because it has the sophistication that people were looking for ... restaurants, hotels and world-class wedding venues.
“There is always a place outside the main city where the rich build their second homes. That's probably what happened to Hermanus. They are looking for a quieter place where they can go for weekends and it’s close to the city. Hermanus has the qualities and sophistication of Cape Town, but in a tiny village atmosphere.”
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