Cape Town may be more appealing for those looking to make a coastal semigration move - as a stable interest rate continues to bolster the residential property market.
Following the unrest in parts of South Africa earlier in July, there can be an expected knock-on effect for property prices in the most-affected areas, specifically KwaZulu-Natal and Gauteng, according to Marcél du Toit is CEO of Leadhome. He says before the outbreak of unrest, KZN's property market was seeing a strong recovery, spearheaded by the coastal semigration trend and the desire for an improved lifestyle as more people work from home.
It therefore stands to reason that Cape Town, spared the brunt of the orchestrated attacks to destabilise the country, could also see a shift in buyers looking to move to areas perceived as more safe.
READ: SA unrest will now 'force buyers to think twice'
“The reality is that potential buyers are going to think twice about buying in the affected areas in the short-term, although property prices will probably correct in the medium to long term as the situation stabilises,” says Du Toit.
When compared to the rest of South Africa's metros, Cape Town has seen a lower performance of late. A 2.5% house price inflation for January to February 2021 (latest available data) puts the Mother City as the lowest performing metro housing market in South Africa for this period.
READ: Cape Town's property market | Semigration, above-average sales and ongoing interest from HNWI buyers
Cape Town's most popular suburbs
But where in the Mother City are prospective buyers searching for property? In June 2021, searches for Cape Town properties on Property24 received over 9.5 million page views. Between April and June 2021 the Cape Town metro received over 29 million page views.
Cape Town currently has *2 017 new property listings, according to Property24 Trends , with the average asking price for the area being R2.99 million. The average sale price per erf for 2020 was about R1.66 million, well above the R1 407 071 average residential purchase price currently in South Africa, while Section Scheme Units in Cape Town have seen an average sale price for the same period is R1.38 million.
READ: The average purchase price South Africans are paying for a home
| Top Cape Town searched suburbs on Property24 between April to June 2021 |
| Suburb | Average Asking price in 2021 | % Difference in Average Asking Price for 2020-2021 | % Difference in Average Asking Price for 2019-2020 | % Change in number of listings per suburb 2019 - 2020 | % Change in number of listings per suburb 2020 - 2021 |
| Clifton | 17 250 000 | -35% | 35% | 23% | 42% |
| Camps Bay | 14 997 500 | -4% | 36% | 1% | 7% |
| Constantia | 9 925 000 | 12% | -8% | 5% | 2% |
| Sea Point | 4 592 500 | -3% | -2% | 13% | 3% |
| Rondebosch | 3 497 500 | 2% | 1% | -1% | -1% |
| Claremont | 2 697 500 | 0% | -2% | 13% | -8% |
| Kirstenhof | 2 572 500 | 0% | 3% | 28% | -20% |
| Pinelands | 2 195 000 | -21% | -5% | 50% | 11% |
| Plumstead | 2 125 000 | 6% | 12% | 32% | -10% |
| Ottery | 1 800 000 | -1% | 7% | 58% | 1% |
| Athlone | 1 685 000 | 5% | 0% | 21% | -11% |
| Retreat | 1 524 500 | 4% | 18% | 45% | -18% |
| Muizenberg | 1 455 000 | 4% | -15% | 34% | -21% |
| Grassy Park | 1 315 000 | 10% | -12% | 148% | -21% |
| Belhar | 875 000 | 8% | -12% | 1% | -6% |
The average asking price for Cape Town in 2020 was about R2 850 000, this is down by some -5% when compared to the pre-pandemic period of 2019, when asking prices listed at an average of R 2 995 000. However, the average asking price in 2015 was R2 695 000, which shows a 6% growth over the five period, up until 2020.
Cape Town's property prices are in fact almost double that of Gqeberhas, the top performing metro market in the country between January to February 2021 - another appealing location for the semigration trend. The average sale price for properties in Gqeberha according to Property24 trends data for 2020 was R800 000.
READ: SA's top performing housing market | 15 most popular suburbs in Gqeberha + asking price averages
“Most of the Cape’s residential property market is seasonal with sales records over the years reflecting that the cold, wet months from May to August are the quieter months with less activity, with an absence of upcountry and international buyers,” says Basil Moraitis, Pam Golding Properties regional head in the Western Cape.
“This year, however, Covid-19 has changed this seasonality and post the hard lockdown we achieved significant, above-average sales as a result of pent-up demand through last year’s winter months - a trend which seems set to continue in 2021. At present, the buoyant activity levels augur well for the remaining winter months. In fact, if this trend continues for a few more months, we will find ourselves back in a seller’s market as we appear to be rapidly reaching a tipping point.
“Coupled with this, it’s notable that international buyers have been more prevalent during the past year than at any time during the past five years, often committing to a purchase sight unseen, especially at the very top-end of the market.”
To illustrate the high demand for homes in the Cape Town metro, Moraitis says in May 2021 alone Pam Golding Properties’ sales of existing homes - that is excluding sales in new developments, were R383 million, compared to R190 million during May 2018 and R196 million in May 2019, representing increases of 102% and 95% respectively. Due to the hard lockdown no sales transactions could be finalised in May 2020.
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“For the period March to May 2021 our sales (again excluding sales in new residential developments) were R1.138 billion, which was 208% over the same period in 2020 due to the lockdown, 55% ahead of normal trading in 2019, and 44% ahead of 2018, which was generally accepted to have been the peak of the market in the Cape region before the price correction which preceded Covid-19, says Moraitis.
“This buoyant trend of sales considerably above the peak of the market in 2018 is evident across all our offices in the Cape Town metro, from the South Peninsula right up to Langebaan and everywhere in between. Each area has appeal for specific buyers – those looking for more space and land are looking further away from the central city to favour the smaller towns, while those considering lifestyle properties are drawn to coastal areas like the Atlantic Seaboard or Southern Suburbs.
Offering advice Moraitis says the best time to sell a property in Cape Town is from September to around the end of April, which usually coincides with Easter. The reasons for this are twofold – improved weather which tends to best showcase properties with exceptional views and outlooks, and the increased number of visitors from around the country and internationally.
“Although the third Covid-19 wave does not seem to have dampened demand for property, it is evident that the market is not following traditional trends and seasonality, which means that now more than ever an experienced agent is essential to correctly price property in line with demand in that particular market segment,” says Moraitis.
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*Property24 Listings Data Disclaimer: The trends detailed in this article are based on Property24 listings, current at the time of publishing, and property transfer data supplied by Deeds offices, which typically take 3-4 months to reflect. Suburbs are listed according to Property24's geographical database. In some areas this will include both commercial and residential properties. The age demographic data of buyers, sellers and stable owners is determined over a six-month period. These Property Values should not be used as a substitute for independent professional advice and is subject to Property24.com Terms and Conditions.
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