Southern Suburbs property market on a solid footing into 2023
Category Market Update
We trust you enjoyed a good festive season and hope that 2023 will be a healthy and prosperous year for you and your family.
While there was understandably a slowing down of the property market last year due to the interest rate hikes, Lightstone data shows that the Cape property market, and Southern Suburbs/Constantiaberg areas in particular have held up well and still ended ahead of the pre-pandemic levels.
The data and performance demonstrates the strong confidence in the Cape Town property market and our areas in particular. As infrastructure challenges mount elsewhere due to poor service delivery and corruption, the demand for Cape property has continued to soar, both for sales and rentals.
Lightstone data for example shows that more people moved to the Western Cape last year compared to the combined influx into the Gauteng and KZN metros. Deeds Office data further shows that wealthy buyers are investing on average more into property in the Cape compared to elsewhere, including the Sandton/Johannesburg upmarket areas.
The City of Cape Town has also just received a "clean" audit (much better than an unqualified audit). Amidst the Eskom crisis, another drawcard is that the City provides some relief to residents who experience one level lower compared to the rest of the country.
The fact that the City is so well managed will continue to underpin confidence in the property market. Demand is further boosted by semigration and second homes. Buyers and tenants are now coming from all over, both locally and internationally.
We therefore enter the 2023-year on a solid footing for the market. That said, while the Cape property performance clearly reflects that buyers are "voting with their wallets", we need to be mindful of the factors which may impact the market.
These include the interest rate. The banks expect a further potential 50-75 basis points to be added in the first quarter as a buffer against inflation, which, while stable at around 7.2%, remains well above the Reserve Bank's target range of 3%-6%. Other factors include the Eskom/energy crisis, ongoing Russian War in Ukraine and weak business confidence.
There is still high demand and opportunities for sellers to capitalise on, but be sure to work with an of success.
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Author: Gina Meintjes
