Cape Town Property Prices on the Increase

Cape Town Property Prices on the Increase

Private Property South Africa
Private Property Reporter

After taking a steep dip in 2009, house prices in Cape Town are slowly on the increase, statistics from Absa Home Loans show. While house prices declined in all provinces, metropolitan areas and coastal regions in real terms in 2009, the Western Cape experienced one of the sharpest declines with a 7,6% decrease in real terms during the year, according to Absa’s latest statistics. In Cape Town, house prices were down 0,7% in nominal terms, and 7,3% in real terms. Of all metropolitan areas in the country, only the greater Johannesburg area performed better than the Cape Town property market with nominal house price growth of 2,8% last year. In the last quarter of 2009 – the latest available statistics – an average house in Cape Town cost R1,11 million, indicating an increase of 1,4% on the last quarter of 2008. This is showing that the housing market is slowly getting out of the doldrums, with banks’ forecasting growth for 2010 of between 6% and 8%. In the middle segment, or houses between 80m² and 400m², the average Cape Town house cost nearly R1,7 million by the end of 2009, and improvement of 6,1% compared to the end of 2008. Investors are also returning to the Cape Town property market to buy prime property at good prices before the market takes off again. In addition, increased lending from banks and relatively low interest rates are also expected to boost the market this year. Cape Town, with a reputation for being extremely well managed compared to South Africa’s other metros, is also an award-winning tourist destination. Some estate agents believe that World Cup fever will provide additional impetus in the Cape Town property market, especially in popular tourist areas like the city centre and along the Atlantic Seaboard.

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