Optimism for Cape Town’s property market despite slowdown
As 2018 market data for Cape Town real estate have made for a depressing outlook, one glimmer of light however is that despite the slowdown, the Mother City remains the most buoyant investment property destination in South Africa.
Optimism for Cape Town’s property market despite slowdown
After a decade of galloping ahead of other markets in South Africa, housing prices in Cape Town have finally slowed down. But, there’s an upside to the downturn, according to property experts.
“This price correction should be viewed positively for the market,” says Richard Day, Pam Golding Properties Group General Manager. “After more than a decade of accelerated house price growth, especially in areas such as the Atlantic Seaboard where property prices increased by 650% in the past 15 years, what we are seeing now is a natural price adjustment.”
What we are witnessing is the market’s normal response to a period of overheating. While the unsustainable rate of inflation, the ongoing drought, and political instability may have exerted a drag on housing market activity, the market also naturally entered a period of price moderation with expectations for further growth in the coming months as investors will regain confidence, Richard continues.
Despite this, the demand for property in Cape Town has remained fairly consistent. From January to June 2018, Cape Town’s real estate outperformed property for sale in Gauteng and other provinces with a 10.6% price growth above the national average of only 4.25%. The Western Cape capital continues to build up, with developments of an investment value of R14.3 billion currently slated for the central business district.
As this region expands over the next couple of years, buyers and renters must think carefully where to invest their money. There’s currently massive interest in reasonably priced units in the city, which can sell within a week from the date of being listed. But, buyers and renters are also exploring housing options in suburbs such as Woodstock and Observatory, which are conveniently located in proximity to the city and feature affordable, live-play-work residential developments.
So, even though the South African property market will certainly face some short-term instability, Cape Town remain the most attractive investment destination compared to other cities.
