Despite a weak economy that has been registering sub-par growth for almost five years, South Africa’s property market remains buoyant.

In Cape Town, business still seems to be booming – but what has allowed the Mother City to prosper as others stagnate?

Space is limited – and everyone wants a piece of it

With overall house price growth exceeding 10% in the Western Cape in the last quarter of 2015, many property experts have been studying the factors that make this region so resilient in the face of a slow economy.

Bucking the national trend, commercial vacancies in Cape Town, which had dropped to just over 7% in the last quarter of 2015, appear to be stable this year. As other cities struggle in a difficult economy, the commercial property market in Cape Town is still growing at a healthy pace, and it’s easy to see why. The city’s geographic location, between mountain and sea, limits the space available for development – and this ensures that property in the Mother City will always sell at a premium.

This combination of factors – steady demand, tight supply, and Cape-bound migration of both home and business owners, along with investor confidence – has allowed the Cape Town property market to grow against the odds. The CBD alone has seen its total property value rise to more than R20 billion over the past few years, and it seems likely that this upward trend will continue.

The highest number of repeat buyers invest in the Western Cape

The healthy growth in Cape Town property prices isn’t just a matter of limited stock. Statistics show that the Western Cape attracts the biggest percentage of repeat buyers of any province, and with an influx of high net worth investors, the outlook for commercial properties looks good in the long term.

It seems clear that property investors have confidence in Cape Town as a location to live, work, and do business, boding well for the city’s future prospects and the performance of its property market – even as the national economy weathers a difficult period.

Where to find value in an expensive market

In a city like Cape Town, where homes regularly sell for R5 million and above, property investors are often discouraged by the large sums that are involved in buying Mother City property. However, there are several affordable options for commercial property investors.

  • Office suites regularly sell at under R 2 million, especially in areas like the CBD and many of the Southern Suburbs that have recently undergone urban renewal.
  • The northern suburbs and northern seaboard (including the Blouberg area) offer excellent value and a great variety of commercial properties.
  • Investors may also buy a property in partnership, reducing each buyer’s contribution to within their budget.

If you would like to explore the investment options in Cape Town property in more detail, contact us today. Our area specialists are waiting to assist you.


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