Housing market steadies ahead, Cape Town property back in demand
Category News
Housing market steadies ahead, Cape Town property back in demand
As we head into Autumn, buyers from all over continue flocking to beautiful Cape Town to take advantage of the fabulous location and lifestyle.
After lagging in the national property market recovery during 2020, the Cape Town property market, in particular neighbourhoods such as the Hout Bay/Llandudno area, bounced back over the last year, ending on a record high in overall volume and value terms.
Heading towards the second quarter, the market steadies on. Although FNB reports that volumes may have peaked, these are still running above pre-Lockdown levels. Where first-home buying was the initial strong boost for the market, there is a clear shift to higher priced and bigger properties.
Mortgages advanced are now about 16% higher in value and properties about 6% bigger compared to 2020 with a clear trend pointing to higher activity ranging up to the R3 million to R4 million range (more in some areas), further great news for Hout Bay sellers.
Trends driving the market include a desire to live in safer areas that offer more lifestyle benefits along with lifestyle changes including the WFA (Work from Anywhere) trend. Hout Bay also continues to top the list for many semigration and holiday home buyers.
FNB notes that overall price growth has moderated considerably and the outlook for national house price inflation is down to around 3.5% compared to 4.2% last year. The takeout is that asking prices will remain under pressure and sellers should heed the advice of their property agents.
While the market remains in a favourable phase, a level of uncertainty remains. There is reason for optimism that the governmental restrictions may be easing, but we must factor in the new geopolitical risks from the Russia-Ukraine War, notably potentially higher oil and food prices and inflation pressure.
Government has provided assurance that SA does have some buffers. Economist, Mike Schussler also recently noted that for the first time in 18 years, SA inflation was below global inflation in USD terms, i.e. 5.7% vs 7.7%.
The interest rate, despite the hiking cycle, is expected to remain below pre-lockdown levels and bank lending should continue to support the market. Economic growth surprised in 2021 and with the relaxation of lockdown restrictions, the economy can start moving ahead on the recovery path.
The message is to take advantage of the market, while you can, whether you are selling or buying. Market factors differ and are unique for each area and neighbourhood. It is best to work with a local area agent who understands the market and can provide the right guidance.
Home is our Story and property our passion. Whatever your property needs, do not hesitate to contact us at any time!
Yours in Property
Author: Seeff
