Property insights, Cape Town market continues to soar
Category Market Update
Cape Town is fast becoming a hub in SA for financial and other services, creatives, and a tech hub with head offices such as Amazon and Takealot. Aside from a steady stream of semigration buyers from all over the country, wealthy property investors and international buyers continue to invest more into property here.
While the market has seen an inevitable slowdown due to the higher interest rate, Propstats data shows that sales transactions worth about R9.3 billion (approx. 2000 transactions) have already been recorded for the Cape Town Metro, these being mostly sales by participating agencies. This includes transactions worth around R2.6 billion across the Southern Suburbs/Constantiaberg areas.
Over the last 10-years, the Cape Town Metro has transformed into the "jewel in the crown" of the SA property market. While the beautiful location between mountains and sea is a big contributor, the City itself under the DA management has also worked actively to improve services and tourism as additional key drivers of the demand for property.
Since the 2010 FIFA World Cup, we have seen tourism and events grow exponentially. This includes the Rugby Sevens Tournament, the Cycle Tour, Two Oceans Marathon and more recently, the Formula E event which boosted the economy by over R1 billion and brought people from around the country and globe to the City.
While the Cape Town property market also faced slower volumes during the Global Financial Crisis of 2008, water crisis and more recently, the Covid Lockdowns, it has nonetheless achieved the best price growth over the 10-year period to 2021 according to a StatsSA House Price Index.
It shows that Cape Town is the hottest property market with price appreciation of a whopping 141% compared to 71% across Johannesburg and 91% in Tshwane/Pretoria. Twice as many high value sales have taken place in Cape Town compared to the upper end of Sandton and Johannesburg.
This is also well reflected in the Southern Suburbs/Constantiaberg property market where demand has grown steadily over the last ten years. According to Propstats data, 2021 and 2022 have been record years for the market with sales of R6.5 billion and R6.9 billion respectively. That is almost 76% up in value for 2022 compared to 2012 (R3.9 billion).
The average price for the Southern Suburbs area increased from R2,1 million in 2012 to R3,9 million in 2022 (85% increase) and for Constantiaberg from R2,7 million to R6,6 million (144%). The latter being largely due to fewer high value sales in the 2012-period compared to the last two years.
Aside from local buyers investing across the Southern Suburbs/Constantiaberg suburbs, we continue seeing high demand from semigration buyers as well as international buyers investing in certain pockets.
While there is no doubt that the higher interest rate is impacting on overall sales volumes and prices, it is arguably still better to be a seller in Cape Town compared to elsewhere. If you are a buyer, then the excellent growth combined with the fabulous lifestyle should be an added incentive to invest now.
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Author: Gina Meintjes
