The Drought Won’t Last Forever

The Drought Won’t Last Forever

The performance of the property market over the last five years has clearly demonstrated that Cape property is well ahead in terms of value growth and high demand.

Although price growth has slowed over the last year as a result of the overall economic slow-down, the Cape remains an excellent proposition for buyers and investors. One thing is for sure, while price growth is slower, the overall average growth measured over the last five years, remains well ahead of the rest of the country according to Paul French, Commercial Director for the Coastal Property Group.

He says further that while the drought will no doubt have an impact, bear in mind, it won’t last forever. The resilience of the Cape’s success story, is due to a number of factors, including:

Tourism – the coastal location means it is ideal for tourism and the city works hard at growing this sector. This brings demand for holiday and second homes as well as for holiday rentals which in turn boosts the buy-to-let market. Despite the drought, international tourism arrivals increased year-on-year in December by 11.5%.

Second home for Europeans – the Cape remains a firm favourite with Northern Europeans both for second homes and holiday purposes bringing people from places like the UK, Germany, Netherlands and other Benelux countries along with visitors and property buyers from across the world. The city is popular for the northern hemisphere people to escape to over their cold winters. The Cape is also popular with retirement buyers from Europe.

Expats and African demand – many expats continue investing in property in the country and much of this is into Cape property. Similarly, Cape Town is an attractive holiday and property investment destination for wealthy Africans and this is a growing market.

Semigration and retirement – the influx to the Cape is likely to be hampered only by the inability of people from upcountry to get their properties sold. The desire remains high to move to the Cape for a variety of reasons including the lifestyle and better quality of life especially for families with young children. The Cape is also a highly desired retirement location.

Rental demand – the city has a very active long-term rental market which provides a further boost for the buy-to-let market. It tends to attract the highest rental returns in the country, but also seems to have better tenants according to recent rental barometers. That is certainly incentive for property investors.

Capital value growth – FNB reported last year that property prices in the Cape metro increased by between 40%-100% over the five year period to early 2017 and by 300%-700% over the last 15 years. Measured on an average basis, this is well above any other area in the country including the upper income areas of Johannesburg, Sandton and Pretoria East.

Lifestyle and choice – lastly, despite the reputation of being more expensive, the Cape really does offer something for everyone. There is a wide choice of sectional title, security and lifestyle estates and you can choose whether you want the urban, suburban, coastal or country lifestyle.

Contact the Coastal Property Group on 021 418 2255 or visit




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