Advice and Opinion

CT’s property market continues to outperform SA’s other areas

Hout Bay home, Cape Waterfront Estates
A house for sale by Cape Waterfront Estates in Albert Road, Hout Bay at a price of R4,495,000. In CWE’s opinion, although Cape Town prices are well above average for South Africa, they are still exceptionally low by international standards.

“Although growth in the South African residential property sector as a whole is likely to remain in single digit figures this year, the Western Cape continues to buck the trend and to perform well ahead of all the other provinces”, says Clare Putsman, a Director of Cape Waterfront Estates, the 22 year old company that focuses on activities on the Atlantic Seaboard particularly Hout Bay, Llandudno and Camps Bay.

“Working off the FNB statistics for residential property for the last quarter of 2016″, said Putsman, “it seems to me likely that property here will continue to increase in value at 10,5% per annum.  By way of contrast, Gauteng is now seeing only 2,5% year-on-year growth.”

“Partly fueled by Gauteng buyers migrating south, who currently comprise 7% in value terms of all Cape Town’s property buyers, demand for property here”, said Putsman, “still far outstrips supply and this factor, above all else, will ensure that price rises continue”.

“Statements from the Western Cape Institute of Estate Agents indicate that there has over the past year been an ongoing influx to Cape Town of buyers from Gauteng and KwaZulu Natal.  At Cape Waterfront Estates we identified this trend (especially the move away from Gauteng) as early as the second half of 2015/the first half of 2016″.

The buyers from upcountry, added Putsman, frequently tell her team that they believe Cape Town offers a better lifestyle, especially as regards outdoor activities, greatly improved security and safety (for many people a prime consideration), good private and state-run schools and vastly better local authority deliveries in all categories.

“Although upcountry people have come to terms with the fact that the sale price they achieve for their Gauteng and KwaZulu Natal homes will not buy them as big a home (or as much land) at the Cape as they had previously, Cape Town”, said Putsman, “is still able to accommodate a very wide spectrum of income earners and budgets”.

“Those who keep track of international property prices,” she added, “have time and again assured us that there are very few major metropolitan areas in the world able to offer Cape Town’s facilities and sophistication at such low residential property prices.”

Asked if foreign buyers are a significant force in Cape residential property today, Putsman said that although that was the situation some 10 years ago and although they are once again on the increase, they currently comprise only a very small percentage of Cape Town’s property buyers.

“It is,” she said, “South African buyers who are keeping the Cape market buoyant and although the recent budget speech has indicated that we are in for a tough year with higher taxes, I and many others remain confident that the startling performance of Cape property and its proven investment value, especially in the upper middle and upper brackets, will continue throughout the coming year.”