Cape Town property market at a tipping point?
Category Property news
Many Cape Town property market stakeholders are wondering what the property market has in store as we approach the end of this unprecedented year.
Ryan Greeff, Director at Greeff Christie's International Real Estate - City Bowl, Northern Suburbs, Atlantic & Western Seaboard says, "at this point, whilst global stock markets and major currencies remain hypersensitive, the Cape Town property market has remained fairly stable with consistent turnover in the lower to middle-end market segments. Purchasers over the ZAR 5 Million mark, seem to be taking a "wait and see" cautious approach which has caused prices at this level to correct up to 50% at the very high end.
The primary reasons that a portion of the market is being propped up, is due to the low-interest-rate environment and cash moving from money market accounts into property for yield.
Marthinus Botha, Managing Director at Greeff Christie's International Real Estate - City Bowl, Northern Suburbs, Atlantic & Western Seaboard explains, "the rental market has had a turbulent time for the most part of the year and we expect this trend to continue as long as the Airbnb market remains subdued and investors are forced in many cases to enter the long term rental market adding to supply. Furthermore, with a substantial amount of new developments projected to come online over the next few years, coupled with low-interest rates that are driving tenants into the purchasing market, we could see suppressed yields and high vacancies across the board for years to come."
Tara Goldberg, Senior Broker at Greeff Christie's International Real Estate comments, "we are hopeful that the steady flow of demand will continue into the new year and that the world will start moving towards a resemblance of normality during the course of 2021, inspiring purchaser confidence at the higher end of the market as well. Whilst the president's address earlier this week contained pockets of encouragement, it is concerning to see signals from various South African leaders stating that further restrictions could be on the cards if cases rise, which would be a devastating blow to what is already a vulnerable market on a knife's edge."
With the "selling season" firmly upon us, we are starting to see more and more homeowners that were previously sitting on the fence now putting their properties on the market to take advantage of the current window of stability.
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Author: Greeff Christies International Real Estate
