Growing confidence in South Africa’s Cape region real estate market, according to experts
Confidence in the real estate market in the Cape region in South Africa is growing and has been helped by the recent football World Cup which focussed interest on the area, it is claimed.
Although the region has not been exempt from the global real estate downturn some part were less affected. According to Audrey Matthews, director of Ronnie Matthews Estates which specialises in waterfront and seaboard properties along the Atlantic coastline, prices stabilised rather than dropped.
‘There was definitely a hiatus in the last year in the exponential growth in property prices we were experiencing. But it was the least affected area, stabilising rather than dropping in price. The property interest has been kick started again by South Africa’s recent showcase in the World Cup 2010,’ she said.
‘Afro pessimism was replaced by a general feeling of goodwill and although there are still enormous challenges in this country, it has not seen such positive international press for a very long time,’ she added.
Matthews added that although the property market can be described as buoyant on the coastline, the buyer is more cautious and the growth expectation more realistic and rational than witnessed a few years ago.
‘Buyers are approaching the investment in this kind of property in a scientific, rather than emotional way. They look at investment, yields and weigh it up against alternative investment avenues and then they buy,’ she explained.
More often than not, these are properties on the coast with magnificent sea views and within walking distance of the beach. Not only is it an aspirational lifestyle for many, but also offers an exceptional long term investment opportunity. The Atlantic Seaboard is a favourite. It is prime coastal property in Cape Town, a picturesque sweep of coastline where the Twelve Apostle mountain range slopes down to meet the ocean on the western side of the Cape peninsula.
The rich cultural heritage and diversity adds piquancy to the Cape and offers property buyers holiday and rental options on their properties. The area is often described as Cape Town’s answer to St Tropez.
Areas like Clifton, Camps Bay, Bakoven and Bantry Bay that are experiencing interest from foreigners and locals alike. ‘The area around Mouille Point between Granger Bay and Sea Point have joined the ranks of blue chip investment and the demand has totally outstripped the supply,’ said Matthews.
Slow but steady economic expansion in South Africa is also fuelling a strong demand for more holiday properties, while increased international tourism is being boosted by government incentives to encourage further foreign investors into the country.
This is partly due to the fact that many Europeans consider Cape Town, South Africa to be not only a country for holidays, but also the place of choice for retirement or permanent homes. The exchange rate between the South African Rand and other major currencies favours property purchase.
Capital economic growth is predicted to maintain a steady rate and keep stable over the next ten years. The levelling out of property prices has led to an increase in interest from international property buyers, which in itself maintains a steady growth rate.
Developers are adding to investment incentive by guaranteeing rental returns for periods to encourage investment. Ronnie Matthews Estates, which also looks after rentals for its buyers, has noticed a growing trend amongst wealthy discerning travellers to choose private, fully serviced luxury apartments over the stock standard mass offerings that the big hotel groups offer.