Cape Town Central City Improvement District CEO Rob Kane says prices in the CBD had clearly run ahead of economic realities in recent years. By Vivian Warby
The year 2013 seems like the time to have bought an apartment in the Cape Town CBD.
Recent data shows that by 2018 apartment prices had increased by a whopping 97,6% in those five years, according to the latest edition of The State of Cape Town Central City Report 2018 – A Year in Review (SCCR) published today by the Cape Town Central City Improvement District (CCID).
The report is indispensable to investors, developers and retailers seeking to invest in a dynamic city centre.
Among other key findings in the report are that:
- 39 new developments (recently completed, currently underway, planned, or proposed in the CBD) include completed projects valued at R2.798bn, developments under construction valued at R1.747bn, planned projects equating to R4,296bn in value, and proposals on the table valued at R4.740bn;
- While vacancy rates for commercial office space rose in the last year, with 30 000m² of new office space coming on to the market, Cape Town continues to have the lowest office vacancy rates of South Africa’s five largest metropolitan centres;
- The retail sector serving workers and residents in the downtown area has remained stable, despite lagging economic conditions, with a steady 93% retail occupancy rate, and an increase of more than a third in the number of restaurants in the CBD, from 114 in 2017 to 153; and
- Cape Town has affirmed its status as the leading digital city in Africa, recognised as a hub for technology development and innovation, and providing over 40 000 jobs in the sector, significantly higher than other tech hubs such as Johannesburg (20 000), Lagos (9 000) and Nairobi (7 000).
CCID CEO Rob Kane says prices in the CBD had clearly run ahead of economic realities in recent years.
Now, “deteriorating affordability has shifted conditions from a seller’s to a buyer’s market, in which buyers are willing to wait for value to return to the market while sellers are no longer dictating prices. We’re also seeing fewer people ‘semigrating’ to Cape Town from across South Africa. This has resulted in a softening in demand for properties in Cape Town, including in the CBD.
“In 2018, the median price of apartments sold in the CBD was R2,1 million, slightly higher than the median of R2m in 2017,” says CCID board chairman Rob Kane.
“After cooling slightly in 2017, as activity levels in the housing market adjusted to prevailing economic conditions, the completion of two new residential developments saw unit sales increase to 361 units in 2018, up from 316 in 2017.”
Micro-units are also trending – with people living in the city opting to live in smaller spaces to take advantage of the downtown amenities.”
Former commercial buildings in the CBD converted to residential buildings include Triangle House, and the former Nedbank building on the Foreshore, recently launched as The Onyx.
Drawing on the results of the CCID’s annual online residential survey, the SCCR reveals that proximity to work, leisure and recreational spaces, the city buzz, and the diversity of the downtown lifestyle are among the top reasons for living in the central city.
Who is living downtown
Young and middle-aged professionals seeking a more compact, flexible lifestyle at the heart of the city.
60% own their property
15% own and rent out
Most are employed full-time, are self-employed or freelancers working in media, marketing, communications, PR, advertising and publishing.
Kane says the report shows that most central city residents are immersing themselves in the live, work and play ethos of the CBD.
“The CBD is geared to support the downtown lifestyle.”
2017 versus 2018
Restaurants (An increase of 39 restaurants in one year):
There are 35 gyms and sports shops operating in the Central City and the café culture and artisanal food scene is growing.