Author: Seeff, 13 March 2017, News
Cape housing market on solid ground.
That said, we are operating in a climate of political and economic volatility that can destabilise the market. The economic outlook remains weak and the threat of a credit ratings downgrade also still a real possibility.
For now though, the metro is still benefiting from an additional 20%-30% influx of buyers from other provinces as well as some foreign demand. This has meant that the Cape property market has performed better than the other metros and this demand is likely to support the market as we go into a challenging year.
Confidence in the metro has once again been confirmed as the Western Cape just scooped top honours as the best performing province for the year with the highest unqualified audits at 79% compared to Gauteng at 60% and KwaZulu-Natal at just 33%.
Seeff says that this underscores the good governance and service delivery that has been a major driver of the demand and will continue driving buyers here until we start seeing a notable improvement in the upcountry metros now governed by the DA, he says.
The effect is also a continued development boom, bigger than even before the 2010 FIFA World Cup.
Although slower overall, residential sales for the metro is already heading to the R17bn mark. Sales to foreign buyers have doubled since 2012 and super-luxury house sales of R20m-plus already amount to over R1.822bn. Prices have again hit unprecedented levels of up to R42m in Bishopscourt (recently sold by Seeff agents, Diane Hosty and Lance Cohen), R33.2m in Constantia, R47m in Camps Bay, R73m in Clifton, R75m in Fresnaye and R290m in Bantry Bay.
Top end rentals can now reach R40,000-R80,000/month on the Atlantic Seaboard with some luxury seaside apartments in Clifton and Mouille Point priced to R120,000/month.
Prices are still growing twice as fast as anywhere else and wealthy buyers are still paying up to 40%-50% more for a luxury home on the Atlantic Seaboard compared to Sandton, despite the fact that Johannesburg has more wealth.
Seeff says that visitors to the Cape do not just desire to return for holiday purposes, but increasingly want to invest in property here despite the premium that they will have to pay.
The city’s accolades are plentiful and it is growing in sophistication with modern high rises, yacht-lined waterfront property and fibre optic internet connectivity adding to the mix. The soon to open, ZEITZ Museum of Contemporary Art Africa will be a historic first for the continent. Add to that a growing list of international hotel brands, a cruise terminal and two top African horse races, the L'Ormarins Queens Plate and J&B Met along with Polo events at Val de Vie.
Schools rank amongst the top performers nationally and we have two globally renowned universities. The beaches are also world-class with the Western Cape scooping top honours in this year’s Blue Flag list with 29 beaches, ranging from Llandudno, Clifton and Camps Bay to Melkbosstrand, Muizenberg and Fish Hoek, all adding to the desirability of property in the city.
The outlook for the summer is upbeat. We expect strong interest in property from visitors to the city over the tourist season. After a quiet winter, we also expect the R20m-plus sector to pick up into the new year.
The 2017 outlook for the metro and Western Cape for that matter remains positive, but cautious. Sales volumes are expected to slow further though, as will price growth, says Seeff. Middle and lower income areas will be under pressure, largely due to rising costs and debt levels, but a level head, whether you are looking to buy or sell, will save the day.