With current trends in the Cape Town residential property market, one can almost consider it to be isolated from South Africa, which is experiencing various economic and political pressures, as demand for homes in the Western Cape Province is still high.

Rising costs, interest rate and tax hikes caused a slowdown of the South African economy in 2015, thereby having a negative effect on residential sales volumes, however, the Cape market still performed well in contrast.

The driving force behind this is due to the high level of demand for properties, which outstrips the level of supply, from both foreigners and even local citizens. Foreigners desire the beautiful Cape and surrounds, the South African weather, welcoming culture and peace of mind compared to overseas where there may be a potentiality of terrorist attacks. South Africans living in the other provinces of South Africa, mostly from Gauteng and a few from Kwazulu-Natal, in addition to the Cape’s beauty, seek the safety, superior service delivery and public infrastructure the City of Cape Town has to offer, in comparison to the inferior service delivery offered by local municipalities in the rest of the country.

With the ever increasing property values and significant growth the Cape is experiencing, more affordable and entry-level suburbs are now being targeted by purchasers, whom are even prepared to downscale, just to own that Cape lifestyle and address. This mid-section of the market, properties below R2m, is said to see increased growth in 2016. That said, top end areas such as the Atlantic Seaboard, where the average price of a Mouille Point sectional title unit has rocketed by nearly 70% in 1 year from 2014, as well as the V&A Waterfront through to Sea Point, Camps Bay, Clifton and past Hout Bay, will continue to see strong demand from top end purchasers.

Sectional title units have seen a drastic increase in sale numbers and the appeal thereto roots from: first-time buyers seeking affordability; convenience and better located properties in the CBD or closer to work and investors wanting buy-to-let properties.

Families seeking community-orientated neighbourhoods are looking to northern suburbs such as Panorama and Plattekloof, which are close to the CBD, Durbanville, top schools and safe parks. These suburbs have experienced a significant boost in the level of renovations of older homes, as well as an increase in demand for properties in the R1.8 to R2.6 million price range. Homes in estates or security complexes have seen the strongest increase in demand and there are even luxury homes rivalling the Atlantic Seaboard and southern suburbs in terms of prestige.

Continued growth is expected for luxury property in Cape Town’s southern suburbs, as the luxury market is generally less affected by the economy than other market segments and property growth in the area is above the current interest rate. An increase in luxury developments is a positive indication that the current growth will continue, as developers will refrain from making loses in areas where they are uncertain as to whether their investment will achieve good returns.

So despite the economic conditions South Africa is currently experiencing and which is said to likely worsen, the Cape is proving that demand for property as well as growth in property value, is generally higher in comparison to the rest of the country, whether sectional title, entry level, family suburbs, luxury homes, seafront or CBD type properties.

That said, should an acquisition or a disposal of a property be in the cards, make sure you get the purchase or selling price right by appointing an independent and registered Valuer with the relevant experience to compile a comprehensive market valuation report. This is even more so important in the Cape, as this property market is in a bullish phase and sometimes the hype carries a purchaser or seller away.

Contact Valuetec today for a fully motivated and comprehensive valuation report to ensure your property purchase or disposal gives you peace of mind.