Activity within the South African property market has begun to cool down, largely owing to higher interest rates and an unstable electricity supply. However, some parts of the country seem less affected than others by the tightening market conditions.
According to Susan Watts, Broker/Owner of RE/MAX Living, an independently owned and operated franchise of RE/MAX SA, the market is certainly tightening given the continued rise in the interest rate, the onset of winter, and the loadshedding that affects all South Africans nationwide.
“These factors are most certainly affecting affordability which has a direct impact on our property market,” she notes. “Luckily, in the Western Cape, we have been somewhat sheltered due to our demand as a holiday destination which has also influenced the number of investors buying property on the Atlantic Seaboard and in the City Bowl.”
Last year, RE/MAX Living celebrated its best year ever with total registered sales of R3.4 billion. “Stats from March 2022 to April 2023 show that 23% of our sold listings on the Atlantic Seaboard were sold to foreign buyers and 21% of our sold listings in the City Bowl were sold to foreign buyers. Watts comments that this is a big jump from 2020 and has steadily increased since then.
“Most foreign buyers are from Europe with the largest number of those being from Germany. In addition, we have significant numbers buying from America and the UK. As an internationally recognised brand with 132 agents in our offices, many of whom speak several international languages, we feel that we are connected enough internationally to state that the demand from abroad has increased since 2020.”
Beyond the foreign market, semigration is another common reason for those who buy property within the Western Cape, often as a result of poor service delivery in other parts of the country, and also as a result of being able to work more remotely. According to the Q1 2023 RE/MAX National Housing Report, all five of the top searched suburbs on remax.co.za can be found within the Western Cape, namely (in descending order) Claremont, Parklands, Rondebosch, Sea Point, and Sunningdale.
Adrian Goslett, Regional Owner & CEO for RE/MAX of Southern Africa, explains that, as much as the property market as a whole can be characterized in specific ways, each suburb will often have its own unique nuances and will require local expertise from a reliable real estate professional who can help clients navigate through the challenges and opportunities that exist in any given market.
“Affordability is likely to be an issue for many buyers across the country, given our current economic circumstances. However, those who do not require home finance might find themselves in a good position to purchase within the current market. Some parts of the country might be in higher demand than others, but these areas also tend to come at a much higher price point too. My point is that, no matter where you find yourself, there will always be upsides and downsides to navigate through,” he explains.
“To take full advantage of the local market conditions while avoiding any pitfalls that might exist, I always recommend leaning on the advice of a reliable real estate professional who knows the ins and outs of the local market conditions,” Goslett concludes.