The mercury is rising as the peak tourist season gets underway, and Cape Town’s beaches and scenic mountains are resplendent, reminding us why the Mother City has just been named one of the best three travel destinations in the world by Lonely Planet.
But Cape Town is also tops when it comes to the property market and, according to Lightstone, it remains the top performing metro market in the country. With an average year-on-year house inflation growth rate of 11.8% during the first half of the year, it is streaks ahead of the national average of 5.6%, and outperforms Durban and Johannesburg that have recorded 7.02% and 4.07% respectively. Pam Golding Properties research analyst Sandra Gordon said one of the factors for this remains the steady movement of people to the Western Cape, and indeed Cape Town. “There has been no slowdown of people coming to the province.” she said. “There’s real growth in the property market.”
Gordon said the massive investments in the CBD have highlighted investor confidence in the city. According to Rob Kane, chair of the Cape Town Central City Improvement District (CCID), there is more than R4.6 billion of construction underway in the city centre and a further R3 billion in the planning stages. Within the next three years, the overall property valuation of the city centre is expected to be over R34 billion. Large-scale developments include the R832 million expansion of the Cape Town International Convention Centre and R33 million Netcare Unit at the Netcare Christiaan Barnard Memorial Hospital on the Foreshore. Investor confidence has also been bolstered by the provincial government’s extensive fibre optic broadband programme to increase internet connectivity. The City of Cape Town has also done its bit to create a digitally inclusive city, and appeal to investors, by creating more than 270 public Wi-Fi zones, and there are plans to set up 60 more in the next financial year. According to the CCID, the City of Cape Town is investing R1.7 billion over the next seven years to create its Municipal Broadband Network. This will go a long way to creating an environment conducive for tech-based businesses.
Buyers are also moving to the Cape from areas such as Gauteng and KwaZulu-Natal because of the province’s proven track record for service delivery, its excellent schooling and laid back outdoor lifestyle. In the metro itself, the Atlantic Seaboard remains a stellar performer as investors look to combine coastal and urban living. They want the proximity to the city centre, as well as lifestyle attractions such as the V&A Waterfront. The sectional title market in these suburbs is booming, with units being snapped up as they are listed. Basil Moraitis, Pam Golding Properties area manager for the Atlantic Seaboard, said: “The demand for properties along the Atlantic Seaboard outstrips supply, as can be seen by the surge in property values. People want to live on the Atlantic Seaboard and they are willing to pay. These properties offer excellent investment returns and are desirable rental options, especially as the summer tourist season picks up.”
The residential market in the central city or CBD has burgeoned from the 750-odd people a decade ago to more than 7 000 residents. With this growing market, a high-quality unit in a city apartment complex can sell for a median price of R50 000 per square metre. The city’s residential growth is on an upward trajectory and Laurie Wener, Pam Golding Properties Senior Executive for Developments, Cape Region, said there are several developments in the pipeline that will significantly boost this burgeoning market. The mixed-use 117 on Strand development is almost sold out, with a 40 square metre studio apartment in this block selling for R2.255 million.
The ripple effect of the metro’s buoyant property market can be felt across the city. Many suburbs are reporting stock shortages, as agents deal with the unrelenting demand for properties. Family homes in the Southern Suburbs, for example, are highly sought after because of the quality schools in the area. On the Western Seaboard, the new luxury Beach Break development offers an affordable entry-point for first-time buyers or investors who still want to be close to the beach.