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These are the hottest areas to invest in property in Cape Town right now

These are the hottest areas to invest in property in Cape Town right now

Although the City of Cape Town has seen some cooling off in average house price growth in recent quarters, at 14.1% year-on-year the market still remains very strong.

According to FNB’s first quarter 2017 City of Cape Town Sub-Regional House Price Indices, the Atlantic Seaboard and to a lesser extent the City Bowl residential markets remain ‘hot’.

In the 1st quarter of 2017, the City of Cape Town’s estimated average house price growth rate remained in double-digit territory to the tune of 14.1% year-on-year, only marginally slower than a revised rate of 14.5% for the final quarter of 2016.

“While still very strong, this year-on-year price growth rate represents the fourth consecutive quarter of slowing from a 10-year high of 15.8% revised rate recorded in the first quarter of 2016,” said household and property sector strategist at FNB Home Loans, John Loos.

While FNB’s data shows widespread strength across most of the metro, nine of 12 defined sub-regions saw growth slowing year-on-year gin the first quarter.

Read: These are the best areas in Cape Town to invest in property

“We believe that, after a very strong run, the city’s residential market is running into affordability challenges for many aspirant buyers, especially the younger first time buyers, and that this in turn may have started to put the brakes mildly on house price increases in many of the sub-regions,” said Loos.

The property lead said that while three of the four major “Peninsula” regions have recently seen slowing house price growth from their multi-year peaks, they remain very strong.

Loos noted that the really ‘hot’ region still appears to be the most expensive one, namely the Atlantic Seaboard, with estimated year-on-year house price growth of 33.9% – this growth still accelerated in the first quarter of 2017.

“This region is something of a world on its own, typically driven by strong levels of foreign buying, as well as perhaps a significant number of very wealthy migrants moving from the likes of Gauteng and other South African regions to the Western Cape.”

In addition, the Atlantic Seaboard has a severe land shortage for new development, being situated on the side of the mountain area, Loos said.

The Northern regions of the City of Cape Town have been showing slowing house price growth in 4 out of 5 of the regions, having never quite reached the highs of price growth that the Peninsula regions did in recent years, FNB said.

The strongest of the 4 major Northern regions in recent times has been the Western Seaboard, in which Blouberg, Milnerton and Melkbosstrand are grouped. “From a multi-year year-on-year house price growth peak of 14.8% in the 1st quarter of 2016, this region’s price growth had slowed to a still-solid 11%,” Loos said.

Grouped fairly closely, but also slowing, were the house price growth rates of 10.1% for Durbanville-Kraaifontein-Brackenfell and 9.7% for Bellville-Parow and surroundings.

 

One of those few regions bucking the recent trend of slowing house price growth is the Somerset West-Strand-Gordons Bay region, FNB said.

At 13.7% year-on-year, this region’s estimated house price growth rate was still on an accelerating path in the first quarter of 2017.

“This region is known to be a popular one both for foreign buyers as well as for affluent up-country retirees, and it may just benefit somewhat from the major affordability deteriorations on the Peninsula,” Loos said.

Stacking up all of the regions next to each other, the Atlantic Seaboard region remained the one with the strongest house price growth in the first quarter of 2017 at 33.9% year-on-year.

5-year cumulative growth rates

A look at the longer term big picture shows the strongest performance to have been clearly in and near to the Cape Peninsula.

 


Read: These are 10 hot areas to invest in property in Gauteng and Cape Town right now


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  • ANCisForTheStupid

    Naah. BS article.

    This is looking historically. These are what have generated the best returns over the past while

    NOT the best places to invest now.

    Northern suburbs will boom to catch up. It’s unavoidable. A price gap as big as is currently in Cape Town between southern and northern suburbs is extremely unusual and wont persist.

    My money is on the northern suburbs booming massively over the next 3 years and the southern suburbs retreating significantly Particularly since there is big government development happening and planned in the north with new roads being built, new shopping centres and schools being built, and the Tygervalley precinct turning into a Sandton of sorts.

    If you buy in the southern suburbs or Atlantic seaboard in the next 3 years you stand to at the very least see inferior returns..

    • 0xbeef

      northern suburbs people.. weird bunch indeed.

      • ANCisForTheStupid

        Yes. Extremely strange that they speak to their neighbours.

        • Cnut Stunning

          You got to be pretty weird to want to live in sa right now

    • Bandile Sifile

      As impress investors to come invest this country is much important to implement and strengthen safety and security

  • Tau’ri

    “These are the hottest areas to invest in property in Cape Town right now”
    … if one had money to invest.

    ‘If we had fish it would be lovely to have fish & chips, if we had chips.’

  • Mikhael Rowe

    What about the Cape Flats?

    • Cnut Stunning

      Drunkards, Moslems, gangsters

    • Bandile Sifile

      That is Ironical matter if you are questioning about flats ,if our government increases job opportunities as well development to those communities were not benefit

  • Alex

    The crash is coming, as CT house prices have not lined up with CT salaries for over 10 years now and the gap is actually getting wider. R1.5 for a small apartment with a combined household income of R20k per month? Um, I think not. I would not purchase property in Cape Town for any amount of money at the present time.

  • Bandile Sifile

    I wish our government they can attract Investors to use the unusable land to be profitable,The land such like to close by Monwabisi beach, we are looking the secret to prevent the State to be not junky status.

  • Bandile Sifile

    The issues of politicians it needs people who are much intelligence about that.

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