Cape Town and the Western Cape are investment destinations that will see property values appreciate in due course, say economic and property experts. In Wesgro’s inaugural property market report released this week, chief executive Tim Harris says the emphasis of the report is to provide research, data and comparative analysis on commercial office, retail, industrial and residential property for sale or to rent to help investors make key decisions.
Harris says in property, it is always someone’s market, and “the Western Cape right now is a buyer’s market across all its property nodes, not just the residential node, making it a highly attractive option for those looking to make fixed capital investments for the first time, or for those expanding on their existing investments”.
After many years of high price growth, property values are stabilising throughout the province, but particularly in and around the metropole of Cape Town.
This is offering opportunities for buyers and “we have no doubt properties here will continue to appreciate in value above any others in the rest of the country, albeit it at a more reasonable rate than experienced, particularly over the past decade”.
Carola Koblitz, the report’s editor and chief researcher, says the report also reveals just how strong the emergence of less traditional key areas are progressing across all property types, but particularly in terms of commercial development, whether these be properties for rent or for sale.
These areas include Somerset West, Woodstock and Salt River, and even areas previously only thought of as industrial areas, such as Montague Gardens and Blackheath.
Harris says a common denominator in the value of property remains fixed capital assets, something most investors seek to ensure viable investment reality. “We believe property is a key driver of investment and often the first consideration investors make when deciding locale,” says Harris.
Cape Town, the country’s second largest economic centre and most-populated city after Joburg, has one of South Africa’s top container ports and second busiest airport.
“It is the second-most important contributor to national employment, playing a crucial role in job creation. Strategic sectors positioned for growth cover manufacturing, financial services, agri-business, tourism, film and media, digi-tech and business process outsourcing.”
Included in growth areas are real estate, property development and construction, as well as dynamic enterprises such boat building, clothing and textiles, electronics, renewable energy and green economy, the report says. “There are few global destinations to rival our geographic, economic and natural qualities,” says Deon van Zyl, who is chairman of the Western Cape Property Development Forum.
Cape Town's six largest economic sectors in value (billions) last year were:
- Real Estate, finance, insurance, business services R115.69
- Wholesale/retail trade/catering/accommodation R72.39
- Manufacturing R63.34
- General government R52.93
- Transport, storage, communication
- R48.24 Community, social/personal services R28.88
The City is involved in several investor-attracting initiatives which include:
- Growth of Cape Town International Airport Streamlining business initiatives
- Creating a smart city through its Broadband Project Positioning the city as South Africa’s green economic hub
With property a key driver, it is no surprise that construction activity nationwide has again risen in Q4, according to FNB’s Civil Confidence Index.
After improving in Q3, construction activity lifted the index to 22 from 15, says the bank’s property economist, Siphamandla Mkhwanazi. Although weak demand remained a key constraint, it marked the first time since Q2 2017 that confidence had risen above 20.
Mkhwanazi says while a majority of survey respondents was dissatisfied with prevailing business conditions, confidence improved mainly due to a second consecutive uptick in activity. “Respondents already reported a noticeable increase in activity during the third quarter.
“A further, and also noticeable, improvement was registered this quarter, bringing the index close to its long-term average,” says Mkhwanazi.