House price growth is slow, but the Atlantic seaboard and the City Bowl are buoyed by more resilient sectors
After almost a decade of double-digit growth and riding high as the country’s strongest rental market, new data from Payprop has disclosed last year yielded the lowest growth figures for the Western Cape since 2012.
Added to this, house price growth in the country has kicked off 2019 a little slower than expected, averaging less than 4% in February, according to FNB’s latest residential property barometer.
This is lower than the 4% growth recorded in January and even the 2018 annual average of 3.9%, says FNB economist Siphamandla Mkhwanazi. In all property market downturns, certain areas fare better than others, especially those where the market has been buoyed by the more resilient corporate and medium-term sectors.
In this instance, the Atlantic seaboard and City Bowl have been buffered by their attraction of tenants, according to Lisa Hendricks and Debra Levin, partner rental specialists for Lew Geffen Sotheby’s International Realty.
“Like most areas, the long-term residential market in these two nodes has taken a considerable knock during the past 18 months, with surplus stock and declining rental returns becoming the order of the day. However, we are still seeing strong demand for corporate lets and medium-term leases, Hendricks says: “The majority of our corporate clients are businessmen who commute between Joburg and Cape Town as well as a considerable number of foreign corporates from the United Kingdon, Germany, the US and other African countries who regularly travel to the city.”
Levin says there is also a significant number of overseas visitors who holiday here regularly and prefer to rent a beautiful apartment on a longer-term basis so they have a home from home rather than different impersonal Airbnb properties each time.
Cape Town as a whole has always been a sought-after city with buyers and investors, says chief executive of Greeff Christie’s International Real Estate Mike Greeff.
“The city is known for its beaches, beautiful views and excellent homes. With world-class features, homeowners can look forward to their homes appreciating in value.”
Greeff says some of the city’s most appealing and noteworthy attributes include a robust property market, scenic surroundings, and excellent schools and academic institutions.
“Property prices in the city have been known to show outstanding growth and remarkable resilience. “Despite a cooling down of the market in 2018 there have been pockets of excellence that prospective homeowners and investors have identified over the last year.”
Some of these well-performing areas include the western seaboard, the outlying areas of the CBD and some lower- to middle-end areas of the southern suburbs and south peninsula, Greeff says.
Added to this, and the fact that Cape Town is known globally for its rolling hills, picture-perfect mountain vistas, and sprawling beaches, property buyers in the Cape can rest assured that the educational future of their children “is in good hands”.
“With many of the country’s top schools located in the Cape, homeowners here can look forward to a selection of schools to choose from without compromising on quality.
“Schools in these catchment areas often enjoy the best educational programmes and extracurricular activities with a focus on the areas of importance which children enjoy.”