Cape Town Will Remain a Safe Bet for Property Investors

Cape Town has always enjoyed a reputation for being a top performer in the South African property market, and despite the forecast price-growth slowdown, all signs point towards a continuation of this trend over the foreseeable future.

As South Africa’s officially-recognised, fastest long-term growth economy, and backed by a history of outstanding property market success, Van der Merwe says it is not unexpected that the Western Cape is maintaining such high levels of investor confidence.

“There are several indicators that Cape Town - and the Western Cape in general - will remain a property hotspot,” says Schalk van der Merwe, a Rawson Property Group franchisee based in theHelderberg Basin.

“The first - and arguably most obvious - sign is our growing popularity with affluent repeat home buyers nationwide.”

Van der Merwe says FNB’s latest research on inter-provincial repeat home buyer migration patterns shows a very low rate of departure from the Western Cape, and high levels of inward migration from other provinces.

“Cape Town and our surrounding areas are perceived as having a high quality of life in comparison to many other South African cities, largely due to our good economic opportunities, excellent service delivery and administration, and enviable lifestyle,” he says.

“As a result, we’re not only retaining existing Capetonians, we’re also attracting high numbers of wealthy, skilled individuals from other parts of the country and the world at large. This is having a direct and ongoing effect on residential property demand.”

This five bedroom, three bathroom for sale inHout Bay is situated in a quiet cul de sac. The home has a covered patio, built-in braai, double garage and garden cottage. It is selling for R5.399 million - click here to view.

With demand fuelling growth, it’s no wonder that Cape Town typically outperforms every other South African urban hub in the residential property sector. In fact, Van der Merwe says the city was recently placed 33rd out of 165 in the international Knight Frank Global Residential Cities House Price Index, with its annual growth rate of 8.6% outstripping Johannesburg (placed 52nd) by a significant 2.6%.

The Western Cape has also had the highest number of super-luxury sales in the country over the last ten years, according to statistics from Lightstone, and has recorded the steadiest growth in that market sector.

“Cape Town has seven of the top ten highest performing suburbs in South Africa,” says Van der Merwe.

“We’re also seeing the spectrum of high-end buyers widening, and more and more under-35-year-olds are joining the ranks of the 45- to 54-year-olds typically active on the Cape’s super-luxury property scene.”

This three bedroom, two bathroom flat is situated in a historical building in the heart ofCape Town’s City Bowl. It is on the market for R5.25 million - click here to view.

It’s not only buyer statistics that indicate a positive future for theWestern Cape’s property market, however.

Growth in related sectors also points towards continued momentum. According to Dr Ivan Meyer, the Western Cape’s Provincial Finance Minister, the fastest growing sector in the province over the last decade has been construction.

“This is an excellent sign for the property industry,” says Van der Merwe. “The fact that construction is thriving proves that there is still room for market growth.”

In addition to this, real estate, finance and insurance took second place in the same list of fastest growing sectors in the Western Cape.

This 90sqm three bedroom, two bathroom apartment on the market in Observatory has a wraparound terrace of 56sqm. It is selling for R3 275 990 - click here to view.

“These are all industries that have a role in property transactions and ownership, and their success is consistent with the kind of property hotspot that the Western Cape has become and will, in my opinion, continue to be.”

As South Africa’s officially-recognised, fastest long-term growth economy, and backed by a history of outstanding property market success, he says it is not unexpected that the Western Cape is maintaining such high levels of investor confidence.

“The Western Cape has proven time and time again that it will weather whatever the economy brings, and forecasts indicate that our property market will do just the same,” says Van der Merwe.