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Cape Town property market showing impressive growth

03 Apr 2017

The latest property barometer of Cape Town's house price indices by FNB reveals how significantly the Western Cape has outperformed the rest of South Africa when it comes to the strength of its housing market and average house price growth, largely due to Cape Town's high demand and overall house price growth.

“The outperformance of the Western Seaboard and City Bowl is reflective of a craving of the wealthy for quality city lifestyle,” says Smee.

This is according to Grant Smee, Managing Director of Only Realty, who says what is most interesting about this barometer is that it indicates the strongest house price growth and top performance being near Table Mountain.

Smee says FNB used the Deeds Office data to construct a new set of house price indices for key sub-regions within the City of Cape Town Metro. This data then showcased that in the 4th quarter of 2016, the City of Cape Town’s estimated average house price growth rate remained in double-digit territory to the tune of 13.2% year-on-year.

“We have noticed this trend over the past few years too, along with the increasing local, international and upcountry demand for Cape Town homes, especially exclusive properties close to the City Bowl,” he says.

“There is no doubt that the appeal of a lifestyle-orientated home on the foot of a natural wonder of the world whilst being able to walk to the CBD has played a big part in increasing demand.”

Similarly, Smee says sellers are experiencing great returns on investment in these areas due to the demand, and this has attracted many new buyers to the region.

As explained in the barometer, he says Cape Town traffic congestion is a contributing factor too, as commuters wish to shorten travelling times.

“In addition to this, we're experiencing many buyers displaying interest in these homes because of the location of Cape Town's most attractive amenities - restaurant districts, the V&A Waterfront, the beaches, promenade, and so forth. Lifestyle has undoubtedly influenced this market,” he says.

FNB further reveals that many wealthy residential buyers come from inland regions such as Gauteng, while the City Bowl and Western Seaboard are able to attract a greater percentage of foreign buyers too, relative to the rest of Cape Town and relative to other SA cities, it would appear.

“The outperformance of the Western Seaboard and City Bowl is reflective of a craving of the wealthy for quality city lifestyle,” says Smee.

“We believe this trend will continue over the medium to long term, and will continue to boost the Western Cape property market from a holistic perspective. Demand will continue to increase, and the values of homes in these regions will increase. However, the only pitfall might be the availability of land.”

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