Looking back at the Cape Town property market in 2020
Category Property news
2020 has been full of surprises across all segments of the property market in Cape Town.
Ryan Greeff, Director at Greeff Christie's International Real Estate - City Bowl, Northern Suburbs, Atlantic & Western Seaboard says, "In Q1, Cape Town started the year slowly with turnover and price points significantly down year-on-year. As South Africa moved into a hard lockdown in late March, deal flow was severely comprised by +- 65 % year on year in the month of April.
Much needed significant rate cuts that followed between May and September ignited renewed buying sentiment, particularly in the ZAR 3 Million and under price brackets."
Marthinus Botha, Managing Director at Greeff Christie's International Real Estate - City Bowl, Northern Suburbs, Atlantic & Western Seaboard explains, "the banks really came to the rescue in Q2 & Q3 by offering 3-6 month repayment holidays on mortgages that prevented what could've easily become a catastrophic oversupply of financially distressed sellers, which in turn would have resulted in prices across all market segments falling significantly.
Despite the lockdowns, to date, Cape Town has seen turnover volumes consistent with previous year on year levels. Price points have been relatively flat in the middle to lower end and have decreased at the higher end. We were hopeful that foreigners would take advantage of the weak rand when the ZAR was trading at over R19 to the USD which would typically fuel the higher end, however, due to travel restrictions and hard lockdowns across Europe in an effort to curb their second wave, it didn't materialize at scale."
Monique Jordaan, market analyst at Greeff Christie's International Real Estate says that "2021 remains exceptionally difficult to predict. On the one hand, here is a large degree of uncertainty around the Government implementing further lockdown restrictions to curb the vitus, Ramaphosa faces a motion of no confidence, the country's debt trap seems to be increasing; all factors that would adversely affect the Cape Town property market. On the other hand, if the reserve bank lowers interest rates further, it could continue to prop up the market and we could see flat prices for some time. At this point, there doesn't seem to be any notable factors that could drive prices up for the foreseeable future and the market remains at high risk of further declines in 2021.
As a company, given our emphasis on continued research and development, we remain optimistic that we will continue to find opportunities in 2021 to ensure that we maximize our seller's returns on their property assets."
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Author: Greeff Christies International Real Estate
