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Sub-regional indices: City of Cape Town

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It is not only the luxury market bleeding in Cape Town, but this downward spiral in the property market has now hit the middle-class, says FNB Economist Siphamandla Mkhwanazi.

It is not only the luxury market bleeding in Cape Town, but this downward spiral in the property market has now hit the middle-class, says FNB Economist Siphamandla Mkhwanazi.

The key takeaways in the FNB 2019 City of Cape Town Sub-Regional House Price Indices showed:

  • The pricier regions to have fallen deeper into deflation (this has become a common theme across affluent suburbs in South Africa).
  • This pressure appears to be spilling over to middle-priced areas. By contrast, lower-priced areas remained resilient, and comfortably in the double-digit territory.
  • Surveyed data shows it is not all gloom and doom, however.market activity indicators remain relatively intact, with recovering trends in first-time buyer and buy-to-let activity. 

Looking ahead, housing market trends will remain heavily dependent on developments in the broader economy. 

In the near term, low-borrowing costs will provide underlying support, though the weak labour market is likely to continue to exert a drag on sentiment and activity, said Mkhwanazi.

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