Areas and Places Mauritius

Cape Metro’s key property markets portray positive activity

Despite intensifying political and economic uncertainty, and slowing national house price inflation, there is still positive activity in key property markets around the country. Pam Golding Properties reported sales of R20 billion across 300 offices for the group for the financial year ended February 2017. The Western Cape is still the top performing provincial property market with an 8.8% year on year inflation rate in March 2017 – considerably higher than the national inflation rate of 4.2% for the same period. 

Semigration remains a strong driver of house prices in the province, with agents reporting substantial interest from Gauteng buyers, either wanting to relocate with their families or to set up corporate accommodation. Cape Town retains its slot as the top performing metro, recording an inflation rate of 14.3% in December 2016; comfortably ahead of the other metros.

The Mother City is racking up the global awards and was recently recognized as a major technology hub when it was ranked 22nd among the world’s top tech cities in the Savills Tech Cities report. Although the city has long been regarded as one of the most beautiful to visit, these accolades also show that the Cape Town is open for business, and ripe for investment. It is also becoming a sought-after corporate destination, with companies such as British American Tobacco SA setting up headquarters in the Waterfront’s new Canal District.

Research by FNB Household and Property Strategist John Loos, based on Deeds Office data, highlights five areas that have outperformed average house price growth across the metro over the past five years: The Atlantic Seaboard, City Bowl, suburbs just outside of the city such as Woodstock, Salt River and Pinelands, the Southern Suburbs and the Southern Peninsula.

The sectional title market nationally remains buoyant, attesting to the growing first-time buyer market and increased trend of downsizing. According to the PGP Index, smaller sectional title prices remain resilient, with a 5.5% year-on-year price increase in March 2017, while the price of larger freeholds properties continues to slow.

There’s also been a significant boom in development, particularly in the City Bowl but also in residential markets in the Southern Suburbs and Atlantic Seaboard. In the City Bowl, where a rapidly growing residential population is pushing up the demand for accommodation, 16 on Bree comprising 350 units sold out in just two weeks. The price of units in this area has spiked considerably, given the demand for a live-work-play lifestyle with the convenience of city living, from about R4 000 per square metre in 2004 to the current average selling price of R55 000 a square metre. Laurie Wener, Pam Golding Properties senior executive for developments in Cape Town, says people are prepared to pay a premium for a new unit with delivery between one and three years. These developments are appealing to those wanting a sound medium to long term investment proposition. The percentage of new mortgages issued by ooba for the purchase of investment properties has risen from 3.3% of total sales in early 2016 to 5.9% in March 2017.

On the Atlantic Seaboard, property prices continue to rise, says Basil Moraitis, Pam Golding Properties Atlantic Seaboard area manager. In Camps Bay, for example, the average property price has escalated from R3.75 million in 2010 to R14.1 million this year. And this escalation can be seen in other Atlantic Seaboard suburbs as well. Apartments in Clifton hit the R140 million mark in the past year, and a bungalow sold for R50 million. The demand for property along the Atlantic Seaboard shows no sign of ebbing, especially as Brexit and the largely favourable exchange rate make it possible for overseas investors to buy property that affords them a lifestyle comparable with Europe and other popular international destinations. In Hout Bay, while sales of properties in the lower end of the market have been sluggish, sales of houses over the R8 million mark have doubled in the past year.

There has also been a turnaround of sales in the Southern Suburbs. Whereas for the past three to four months most of the sales were in the R10 million and below price bracket, agents are now reporting a growing number of sales in the top-end of the market, with a home selling in Rondebosch for R15.5 million; the highest recorded sale in this suburb to date.

The Western Seaboard is one of the faster growing areas in South Africa and the past two decades has seen the emergence of new suburbs such as Century City, Royal Ascot and Parklands. Parklands has now expanded across Sandown Road and development in this area continues unabated, says Emarie Campbell, Pam Golding Properties area manager for the Western Seaboard. Prices in this area average at R2.5 million with an entry level home selling for around R600 000. Homes in the top end can sell for up to R15 million. About 60% of the sales in this market are cash and the Western Seaboard’s sales for the financial year under review was R610 million.

The South Peninsula has also shown significant house price escalation, and Sandi Gildenhuys. Pam Golding Properties area manager says house prices in suburbs such as Kalk Bay, St James and Noordhoek have shown a significant increase. Three properties on Boyes Drive and other prime areas were on the market for between R11.5 and R12.5 million. Prices have been steadily climbing since May last year, in part because of the near completion of the road refurbishment in Kalk Bay, but also because of the semigration of buyers from Gauteng and other provinces. There are also “swallow” buyers who live in the United Kingdom, France and Germany but choose to spend a few months of the year at their seaside home.


The Western Cape rental division has concluded numerous notable leases during the 2016/2017 financial year for upmarket flats and houses on the Atlantic Seaboard, City Bowl and Southern Suburbs.

Pam Golding Properties rental manager for the Western Cape, Cape Metro, Dexter Leite, says there has been considerable growth across all our markets, underpinned by the strong demand for rental property largely due to the continued migration to the Cape from other provinces. Noteworthy monthly rentals include R157 000 for Bishopscourt, R150 000 for Clifton, R105 000 for Constantia and R75 800 for Camps Bay. Short-term rental rates were also significant, and included R26 500 per day for Camps Bay and R16 000 a day in Bakoven.

Good news for first-time buyers

The announcement by Treasury that the threshold for transfer exemption has increased from R750 000 to R900 000 will have a significant impact on the market, especially for first-time buyers. Positive activity in this band of the market will influence demand and prices in higher bands as prospective home-owners move up the property ladder. Pam Golding’s research shows that the buyer activity in the lower-than-R1-millon-band continues to outperform the national market, as the demand for housing in this affordable price bracket continues to increase.

International footprint

Pam Golding Properties has also been busy with international property transactions and in the past 18 months, almost 100 transactions to the value of €70 million have been concluded in Portugal alone. Most of these buyers were South African. South Africans continue to reflect keen interest in off-shore property destinations including Seychelles, Mauritius and Europe, especially if these are coupled with residency and/ or citizenship opportunities and visa programmes.

In conclusion, while there are local and international reasons to be conservative in formulating predictions for the year ahead, current trends indicate that the South Africa residential property market remains resilient and, provided there are no excessive shocks to the system, will continue to provide value for local and international buyers.