Discover why Cape Town and Umhlanga are top luxury property picks for global investors

Cape Town and Umhlanga in KwaZulu-Natal have emerged as possibly the best-value luxury destinations in the world for foreign high-end property investors.

According to Bradd Bendall, national head of sales at BetterBond, international buyers are discovering exceptional value due to lower interest rates, a stronger rand, and rising demand in the Western Cape and KwaZulu-Natal.

The purchasing power of foreign currency in South Africa remains significant, also allowing buyers to invest in property that combines lifestyle, security, and luxury at a fraction of the cost of Europe or the United States

“Property prices have been rising, with a new record average purchase price of R1.63 million reached at the end of 2025. However, this hasn’t diminished the country’s appeal as a luxury investment destination. Even at R16.40/$ (as of 9 January 2026), international buyers are still getting excellent value for money when they invest in South African property,” says Bendall.

In recent months, South Africa has enjoyed renewed economic confidence, with the prime lending rate at 10.25% - its lowest in 14 months - and the rand at a three-year high, bolstered by record gold prices.

After the rand strengthened by 14% against the US dollar in 2025, many are keen to secure a foothold in the market before it strengthens further.

According to the latest Knight Frank Wealth Report, homes in Cape Town and KwaZulu-Natal’s North Coast remain at least 50% cheaper than comparable properties on the French Riviera or the Mediterranean.

Global comparisons

The appeal of South African luxury property becomes even clearer when compared internationally.

According to Knight Frank’s Prime International Residential Index (PIRI 100), in Monaco, $1 million (around R16.5 million) will buy you a 16-square-metre studio - roughly the size of a parking bay.

Your money stretches further in Dubai, where $1 million buys a modern 95-square-metre two-bedroom apartment.

In London, home to many South African expats, the same amount secures only a small one-bedroom flat.

By contrast, along the Atlantic Seaboard in Cape Town or in Umhlanga, KwaZulu-Natal, the same amount could purchase a sprawling 200-square-metre villa or penthouse.

The ‘Nettleton-effect’

High-profile sales in affluent suburbs further illustrate confidence and value in South Africa’s luxury market.

Last year, number 5 Nettleton Road in Clifton sold for R157 million.

Bendall notes that although the buyer in this transaction was South African, foreign buyers account for over 40% of all sales above R10 million and 25% of transactions in the R5 million to R10 million price band.

Cape Town and Johannesburg have also been named in the Africa Wealth Report 2025 as two of the wealthiest cities on the continent.

With 40% of all transactions over R10 million concluded in the Western Cape, it is unsurprising that five of the suburbs with the most expensive properties are in Cape Town.

In areas such as Camps Bay, Clifton, Constantia, Bantry Bay, and the Waterfront, properties sell for upwards of R20 million.

“Although Dubai and Miami are among a new wave of wealth hotspots attracting high-net-worth buyers, Cape Town’s geographical constraints create a ‘forced scarcity’ of development opportunities. This means that demand will always outweigh supply,” explains Bendall.

“The relentless demand for luxury living in these coastal suburbs means that an investment offers considerable returns, even during economic downturns.”

Robust market growth

South Africa’s luxury property market has shown robust growth.

BetterBond’s September Property Brief notes that home loans of upwards of R3 million increased by 6.6% year-on-year and now account for 10% of all bond approvals.

Tourism boost

With international arrivals up by 20% in 2025, the short-term rental market in Cape Town is booming.

A well-located apartment on the Atlantic Seaboard can achieve gross rental yields of 7% to 9%, significantly outperforming the 3% to 4% yields typical in London or New York, as reported in the Knight Frank World Cities Index (2025).

Beyond financial value, South Africa’s abundant natural beauty and quality lifestyle continue to attract international buyers.

Increasingly, wealthy investors are also looking for resilience and sustainability.

“These buyers don’t just want homes with views; they want sustainability and long-term insurability,” says Bendall.