Economy and Rondebosch Property Market Poised for Growth
Category Market Update
It may all finally be coming together for the economy and property market with a number of positive factors, and recent economic developments. This is indeed good news for the property market, sellers, buyers, and investors, and hopefully paves the way for a more positive and productive year ahead.
Recent positive indicators include the FTAF Grey List exit, and S&P credit upgrade to a BB positive rating (the first in 20yrs) based on an improved fiscal and economic outlook. Better economic growth is expected for next year, supported by Finance Minister, Enoch Godongwana's mid-term budget which focused on debt consolidation and reduction, infrastructure development, and growth. The improved growth outlook was also echoed by the Reserve Bank Governor when he announced the latest 25bps interest rate cut.
Inflation has remained fairly contained at a historic low of around 3.3% on average for the year despite the recent marginal uptick. The rate is also still comfortably within the Bank's proposed new lower inflation target range of 2-4%. Additionally, the currency remains stable below R18.00 to the USD, recently strengthening closer to the ZAR17.20 mark. These are encouraging for a potential further rate cut in the new year.
The interest rate cuts, amounting to six cuts since mid-2024, have been hugely positive for the economy and property market. The latest cut in November brings the prime lending rate down to 10.25%, reducing the cost of borrowing, in particular that of home loans, providing significant savings for consumers and home owners with more disposable income to spend in the economy. The cuts have directly enhanced property affordability and are expected to further stimulate buyer demand.
For the Cape Town property market, it has been another strong year as it has again significantly outperformed the national averages, and looks to end the year with the highest average price growth. The market has been rewarding with positive momentum for sellers and buyers, fuelled by sustained buyer demand, semigration and investment trends, and the strong local governance.
The Southern Suburbs, and areas such as Rondebosch in particular, have enjoyed another excellent year. Lightstone data shows that the last few years have seen record volumes of sales with the median freehold house price at around R6.25 million, about 35% higher compared to the pre-pandemic period. Properties are selling literally within a week to a month on average, and almost 70% of sellers have achieved within 5% to full asking price. This underscores the demand and investment value of the suburb. The central location and access to top schools and UCT being among the top draw cards for buyers.
As a result of the high demand, we continue experiencing a shortage of stock in the Rondebosch market, especially as we head into the busier summer months. Conditions are particularly favourable for sellers right now to achieve an excellent price. As a market leader in the suburb, you are assured of an award-winning service and the best advice. If you are considering your next move, or would like an assessment of what your property might sell for, contact me now via WhatsApp, email, or phone.
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Author: Gina Meintjes
