A lot of people leave the major urban centres of Cape Town, Johannesburg or even Durban to avoid the press of hectic life and living by the seat of their economic pants. This is why real estate in Plettenberg Bay or Knysna remains so popular despite the distance from economic centres. People would gladly take a long drive or a short flight for important business in those centres than live in them.
And those instincts appear to remain true as the economic realities of a recession hit most of the country and the fears of a drought in Cape Town and surrounds have barely begun to subside. The good news is that Cape Town retains one of the highest growth rates for real estate in the country. It’s only really against its own previous success that the numbers reflected today look less impressive. Cape Town property is a victim of its own success.
According to reports from FNB, “Despite good recent rains and signs of drought alleviation in the region, which is good for its economy and sentiment, we remain of the belief that poor levels of home affordability in the region, after strong house price growth in recent years, will cause house price growth to continue to slow in the near term.”
Essentially this comes down to local South Africans currently being unable to match the prices in the Cape Town property market. Salaries need time to increase to the point where property can begin to move around once more, and this will require a more stable economy and growth. This isn’t necessarily bad news, however, as experts at Pam Golding have stated, this gives other areas outside of the Atlantic Seaboard time to catch up.
