As we move into the second half of the year, Cape Town’s property market continues to show remarkable resilience and vigour despite economic and political uncertainties. This is according to Alexa Horne, DG Properties’ Managing Director, who unpacks what the past few months revealed for the industry and what the rest of 2024 is anticipated to bring – covering buyer demographics, popular nodes, buying preferences, the rental sector and more.
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Horne says that the first half of 2024 was nothing short of exhilarating for Cape Town’s real estate sector. The Quarter 2 2024 (Q2 ’24) statistics released by home loan comparison service, ooba Home Loans, reveal that the Western Cape registered the strongest growth across both the first-time and repeat-homebuyer categories (7.8% and 6.3% nominal increases respectively) and is the only region to record real (inflation-adjusted) increases in property prices.
Horne notes that the luxury market, particularly properties priced above R20 million, has shown robust performance. “Cape Town’s allure for overseas investors, driven by favourable exchange rates and the city’s value-for-money lifestyle, continues to bolster the market. This surge in interest has seen sales exceeding R40 million, underscoring the confidence of ultra-wealthy buyers in Cape Town’s vibrant market.”
Doubling of inbound migration rates
Semigration trends have also played a pivotal role, with the Western Cape experiencing a doubling in inbound migration rates compared to pre-2020 figures. Attractive employment opportunities and the region’s enviable lifestyle are significant draws, as Horne observes. Notably, semigration property purchases intended as main residences account for the majority, but investment and rental property interests are on the rise.
“Adding to this momentum, the City of Cape Town secured a R3.5 billion financing boost for infrastructure investment, promising to further enhance the city’s appeal and support real estate growth.”
Political winds, market reactions
The recent elections brought a mix of caution and subsequent optimism. While the mid-tier market experienced a temporary slowdown, the post-election period has seen a rejuvenation in activity. Horne explains that the high-end market remained largely unaffected, continuing its steady pace of sales.
“This renewed enthusiasm is mirrored in DG Properties’ developments, where younger homeowners, first-time buyers, and international investors are actively participating, signalling a robust and dynamic property market moving forward.”
According to the statistics released by ooba, an interesting new development sees growing investment from homebuyers aged 18 – 31, with a greater percentage of younger homebuyers leveraging property as a wealth-building strategy. Whilst buyers aged 26 to 30 registered the strongest annual price growth in the average purchase price – at 4.2% – a clear indicator that they are prioritising homeownership and making financially savvy investment decisions.
The statistics also show that the recurring buy-to-let trend in the Western Cape continued in Q2 ’24 – and the Western Cape has been the key driver behind the national surge in investment demand, accounting for 32.4% of all applications received for the region in Q2 24 (up by a healthy 2% year-on-year).
Hotspots and property preferences
“Cape Town’s Southern Suburbs, particularly Bishopscourt and Upper Constantia, are standout performers and DG Properties has dominated these areas, selling 21 properties totalling over R500 million to date.”
“The Atlantic Seaboard remains a magnet for luxury buyers, with notable transactions such as an unlisted R44-million penthouse in Bantry Bay, sold by one of DG Properties’ top agents, Lesley Rensburg. DG agent Adrien Epstein also secured full asking price of R59.95 million for an exceptional Clifton bungalow.”
The enduring popularity of the suburbs Orangezicht and Higgovale, which border the Cape Town CBD, is reflected in the impressive property sales reported in these areas. DG’s Keith Anderson highlights notable transactions, including a sale in Orangezicht for R43 million and two in Higgovale for R25 million and R10.75 million respecitvely .
“Currently, the market features exceptional properties such as Wabi Sabi in Higgovale, a serene and luxurious home offering unparalleled views and modern design,at an asking price of R75 million. In Orangezicht, House Sidmouth is available for R49 million, boasting a spacious layout with sophisticated decor and high-end amenities, making it an ideal luxury retreat,” he says.
“Additionally, smaller luxury apartments and mixed-use developments near the CBD and in Sea Point are garnering significant interest. Developments like The Fynbos are particularly noteworthy, attracting a diverse mix of buyers keen on sustainable and connected living.”
Buyer preferences: eco-friendly, functional
According to Horne, luxury homebuyers in Cape Town are increasingly prioritising solutions to manage loadshedding, eco-friendly features, and integrated living environments. Gas-powered appliances, generators, inverters, solar heating, water purification systems, and smart home technologies are high on the wish list. “The trend towards properties that offer a blend of residential, commercial, and recreational spaces is also growing, appealing to those seeking a holistic lifestyle.”
“Outdoor spaces and security are also paramount.,” says Horne. “Gardens, terraces, balconies, and advanced security systems are highly sought after. The flexibility of home spaces to serve multiple purposes, such as home offices or gyms, reflects the post-pandemic shift towards remote work and home-based activities.”
Diverse buyer demographics
Cape Town’s property market is attracting a varied demographic, from local families and investors to international buyers and returning expatriates. European investors from the UK, Germany, Italy, the Netherlands, and France, as well as African investors from Mozambique, Zimbabwe, Angola, Cameroon, and Nigeria, are prominent players. Horne notes that the Atlantic Seaboard and Southern Suburbs are particularly popular among international buyers.
“Local buyers are equally enthusiastic, with many investing in properties that offer a lifestyle, prioritising wellbeing and sustainability. The market also sees a trend towards multi-generational living arrangements, appealing to both family accommodations and rental income opportunities.”
Rental market boom
The rental market has been remarkably robust, with rising demand and limited supply driving rental prices up. Factors such as higher interest rates and semigration have significantly increased rental demand. DG Properties reports rental stock shortages, with properties being snapped up even before listing. “Areas like the City Bowl, Atlantic Seaboard, and Southern Suburbs are highly sought after, commanding rental prices well over R100,000 per month for luxury properties.”
Trends shaping the future
Looking ahead, Horne anticipates a promising second half of 2024 for Cape Town’s property market.
“Stable economic indicators, cooling inflation, and potentially favourable interest rate conditions bode well for the market. The influx of young professionals and the growing trend towards sustainable and smart living further enhance these prospects.”
“Prevailing geopolitical instability may incentivise additional investment from abroad, while improvements in electricity supply and favourable property finance conditions are expected to drive continued growth. With the traditionally busy summer season approaching, Cape Town is poised to maintain its status as a prime real estate destination.”
