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Property Talk

Property Talk

Author: Andreas Wassenaar
Date: 2018-05-25

Insights into the Property Market

What do the 9 suburbs of Bantry Bay, Mouille Point, Clifton, Camps Bay, Bakoven, Fresnaye, Sea Point, Green Point, Three Anchor Bay and Hout Bay have in common They are collectively known as the Atlantic Seaboard and represent the absolute pinnacle of residential real estate in South Africa.

For those who own apartments in the V&A Waterfront, you are classified as part of the City Bowl and equally have some eye-watering priced homes. As somebody who services the very top end of the residential real estate market I noticed that the first quarter of 2018 was plagued by surprisingly low trade. I also noticed that the flagship areas in the country, notably the Atlantic Seaboard suburbs, were also not posting the sales volumes we had become used to seeing.

The recently published FNB property report on the City of Cape Town House Price Indices supports my observations and provides some valuable insights to the state of this segment of the property market.

The overall City of Cape Town house price index growth rate has shown its 7th consecutive quarter of slowing growth off a 10 year high of 15.6% recorded in the 2nd quarter of 2016. Interestingly the slowest growth rate in the first quarter of 2018 was recorded along the most expensive region, the Atlantic Seaboard. Price growth has slowed to a sobering 2,3% from the insane 27,5% high reached in the final quarter of 2016.

This is not too surprising as the Atlantic Seaboard has experienced 111% cumulative price growth over the past 5 years. The City Bowl as a comparative has declined from a high of 23.6% in the 2nd quarter of 2016 to 10% by the 1st quarter of 2018. By most price growth measures across the country this is still exceptionally high.

The Southern Suburbs, which include flagship suburbs such as Bishopscourt, Steenberg Golf Estate and Constantia, saw a slowdown to 8.4% in the 1st quarter of 2018 from a high of 16.1% recorded in the 2nd quarter of 2015. Proximity to the City Bowl or the Claremont Business Node has become increasingly important as the traffic congestion deteriorates.

One of the great privileges of living in Ballito is the relative absence of traffic congestion for the most part at this stage. There is no doubt that as the rest of Pretoria move down to the Dolphin Coast this will inevitably have to change - but for now we enjoy the lack of congestion and traffic.

The outlying suburbs in Cape Town such as the Northern Suburbs seem to have been the beneficiaries of the crazy prices along the Atlantic Seaboard and City Bowl, showing double-digit price growth of 14.4% in the 1st quarter of 2018 for the area called the Western Seaboard, which includes Blouberg, Milnerton and Melkbosstrand.

These suburbs have become favourites for Durbanites migrating to the Cape as it offers proximity to the beach (and the freezing water) at more manageable pricing. In general it seems the further away from Table Mountain you go the more affordable the pricing becomes. Excluding of course the Winelands areas of Pearl Valley and Val-de-Vie and other high demand golf and lifestyle estates around the Stellenbosch region.

It seems evident that the migration to the Western Cape from the rest of SA has slowed over the past 18 months with the drought having some impact - although this could be considered temporary and second to the pricing and affordability aspects. For now in the month of May, in Ballito, we enjoy perfectly mild weather and clear sunny days.