If you own property in Mosselbay then you may not be following the real estate growth numbers of Cape Town but they tell an interesting story which may apply to further out in the Western Cape. It would seem that the Mother City’s growth rate is a victim of its own success as property along the highly prized Atlantic Seaboard sees lower than expected growth.
While many of us would have expected growth to increase with the drought slowing down and dams at much higher levels than they were this time last year, this does not appear to have helped much. A national recession will certainly be a least partially to blame and Cape Town does maintain some of the highest return on investment in the South African property market, but the numbers aren't what they could be.
Experts at FNB believe that the most important factor is actually that real estate values in Cape Town have soared so high for so long that the average South African can barely afford to make a purchase. This means that household incomes need time to catch up with property market values and, as such, sales are slower than they could be.
It isn’t the same case for all areas in the metro, however, with areas outside of the Atlantic Seaboard still performing on par with or even better than expectations. But that may not last much longer. With apartments in prime areas going for as much as R43 million, it’s small wonder that the vast majority of citizens are looking at alternatives.
FNB’s property index showed Mossel Bay, George, Knysna, Plettenberg Bay and Oudtshoorn house price growth had still been at a relatively strong rate of 10.3% in the fourth quarter of 2017 and things continue to hold steady for the region in 2018 in comparison.