Property market steadies ahead, Cape Town property back in demand
Category Market Update
As we head into Autumn, buyers from all over continue flocking to beautiful Cape Town to take advantage of the fabulous location and lifestyle.
After lagging in the national property market recovery during 2020, the Cape Town property market, in particular areas such as the Southern Suburbs, bounced back over the last year, ending on a record high in overall volume and value terms.
Seeff Southern Suburbs continue seeing excellent activity in the property market as we head into the second quarter. Although FNB reports that volumes may have peaked, these are still running above pre-pandemic levels. Where first-home buying was the initial strong boost for the market, there is a clear shift to higher priced and bigger properties.
Mortgages advanced are now about 16% higher in value and properties about 6% bigger compared to 2020 with a clear trend pointing to higher activity above R3 million, further great news for Cape Town sellers.
Trends driving the market include a desire to live in safer areas that offer more lifestyle benefits along with lifestyle changes including the WFA (Work from Anywhere) trend. Cape Town continues to top the list for most semigration buyers with areas such as the Southern Suburbs top of the list.
FNB notes that overall price growth has moderated considerably and the outlook for national house price inflation is down to around 3.5% compared to 4.2% last year. The takeout is that asking prices will remain under pressure and sellers should heed the advice of their property agents.
While the market remains in a favourable phase, a level of uncertainty remains. There is reason for optimism that the pandemic may be waning, but we must factor in the new geopolitical risks from the Russia-Ukraine War, notably potentially higher oil and food prices and inflation pressure.
Government has provided assurance that SA does have some buffers. Economist, Mike Schussler also recently noted that for the first time in 18 years, SA inflation was below global inflation in USD terms, i.e. 5.7% vs 7.7%.
The interest rate, despite the hiking cycle, is expected to remain below pre-pandemic levels and bank lending should continue to support the market. Economic growth surprised in 2021 and with the relaxation of lockdown restrictions, the economy can start moving ahead on the recovery path.
The message is, take advantage of the market, while you can, whether you are selling or buying. Market factors differ and are unique for each area and neighbourhood. It is best to work with a local area agent who understands the market and can provide the right guidance.
Whatever your property needs, do not hesitate to contact any of our Seeff Southern Suburbs property agents at any time!
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Author: Gina Meintjes
