A strong desire to live in the Western Cape will continue to fuel demand for property in 2016.
Cape Town’s property market performed exceptionally well last year, and although the economic outlook may have changed the playing fields somewhat, demand for homes in the province is still high.
“While sales volumes slowed in 2015 on the back of a notable slowdown in the economy, a rise in overall costs (including utility costs), the interest rate hikes and of course the tax hikes which included an increase in transfer duty on transactions above R5m, the Cape market has nonetheless performed well in 2015,” says Samuel Seeff, chairman, Seeff Properties.
“In terms of areas of growth in 2016, the mid-section of the market – that is properties priced below R2m – will continue picking up the bulk of activity, but the top-end areas – which include the Atlantic Seaboard (from the V&A Waterfront right through to Sea Point, Camps Bay and Clifton and in fact stretching past Llandudno to Hout Bay) – would continue seeing strong demand from top-end buyers.”
Laurie Weiner, MD, Pam Golding Properties in the Western Cape Metro Region, points out that the property market in the Cape is still in a bullish phase with demand outstripping supply.
“In a perverse way the poor economic indicators seem to enhance the desire to invest in property due to its historically good capital growth and even rental yields from the equally upbeat rental market. The weak rand and increasing interest rate also make property a wise investment, especially for those with cash.
We expect two new drivers to increase buying activity, namely foreign-African captains of industry and professionals for whom access to the Cape is relatively quick with all its benefits, and the Cape becoming a preferred destination for holiday or part-time/full-time residence due to its safety compared to the widespread overseas terrorist activities.
Lew Geffen, chairman, Lew Geffen Sotheby’s International Realty, says the Western Cape is experiencing and will continue to experience a net influx of homebuyers – largely from Gauteng, but also from KwaZulu-Natal – and that families are often prepared to downscale to accommodate the higher property prices, simply to be able to live in Cape Town and its surrounds.
“There is a correct perception that service delivery is far superior in Cape Town when compared to the rest of the country, and that public infrastructure in the city works better than it does anywhere else. People with the means to afford it want to live in a city where the water supply doesn’t summarily disappear for days, where traffic lights work and where there is more tar surface than potholes,” he says.
“I don’t believe we’ll see a slowing of this ‘Great Trek’ in reverse any time soon, but this time it’s happening across all colour lines. South Africans in general are fed up with local governments that don’t deliver services, and everybody has a right to feel safe,” he says.
This article originally appeared in Neighbourhood, Sunday Times.