The real estate market has seen a marked change in buyer tendencies in South Africa. Until 2007, when the market was healthy and thriving, almost every home had some appreciation value. You could buy property anywhere and see the value improve over a course of three to four years. That appreciation generally proved profitable enough for the home buyer to invest comfortably.
Today, the situation is very different. Most buyers are wiser and pickier when it comes to buying property. Not every house sells easily or makes enough profit to cover investment. The turn happened when the global economy took a stumble in 2008-09. It affected the real estate market everywhere, including South Africa and prompted a change in buyer attitude.
Why People Look for Value
The primary motivation behind home purchase has altered over the years. It’s still one of the biggest investments a person can make, having heavy long-term financial consequences.
A few years ago, people bought homes because they wanted a place to live in, a secure property where their family would be comfortable and grow. Today, more and more people have started to look at homes as an investment. From an investment perspective, Cape Town is a highly desirable market.
The general perception is that Cape Town offers a better standard of living and a more relaxed lifestyle. The local government is also considered very efficient, making it a very good place to live. The great summer weather along with coastal views makes it a very attractive option for a home buyer. Sea-side homes are very much in demand.
The Cape Town Market
Few years ago, people would shell out several million rand to purchase property on Atlantic seaboard suburbs. Homes in places like Clifton, Camps Bay, Constantia, and Bishopscourt could easily fetch upwards of R20 million.
Now, people are more interested in lower priced homes in suburbs such as Stonehurst Mountain Estate and Noordhoek. This shift in interest isn’t just because of affordability, but rather the appreciation value of these homes.
In Noordhoek, there’s been an all-round appreciation of 34%, with an increasing number of buyers flooding in from Johannesburg and Pretoria with the intention of relocating. Similarly, Stonehurst has also seen significant growth, attributed to charming townhouses and standalone homes with prices ranging from R3 million to R15 million.
Suburbs close to the cities like Mouille Point, Tamboerskloof, Higgovale, Oranjezicht, Observatory, and Three Anchor Bay all have seen growth over the years.
This showcases a trend that some people prefer the more relaxed lifestyle of Noordhoek and Stonehurst, while others prefer to be close to the city for an easier commute to work. Regardless of personal preferences, the overall buyer tendency has shown a marked shift towards appreciation value and investment potential.