Your 2021 property market end year in review & the impact of the Metaverse
Category Cape Town Property Market
2021 has been a roller coaster for most industries and the Cape Town property market has been no different!
In the sectional title market under the R2.5 million mark, things got off to a roaring start with interest rates at historical lows setting the stage for a large number of new entrants to stream into the market. As a result, many, once tenants, became first time buyers which put strain on rental prices across all spectrums. Subsequently, the already suppressed rental market saw 15-30% declines in the first half of the year which caused active trading as investors looked to offload their property investors in the search of higher yields and capital appreciation.
In the full title property space, the R3-4.5million bracket saw consistent movement as purchasers took advantage of low interest rates to upscale from sectional title properties. In the R5 million+ range however, turnover remained fairly subdued as affordability constraints were prevalent given the banks reluctance to provide 100% loans at the upper price levels.
Fast forward to the second half of the year, a significant trend emerged whereby purchasers started to move out of the city due to working from home models becoming the new norm and something that seems here to stay in one hybrid form or another. Seaside properties in areas such as the Atlantic and Western Seaboard, Noordehoek, Simonstown and the Southern Suburbs, which offer good value for money and quality of life, became the new craze which has seen double digit growth in some of those areas.
We see this trend continuing which is likely to put downward pressure on property prices in and around the City in 2022, especially with the likes of the 3D workplaces in the Metaverse popping up which will inevitably start playing more of an active role in people's working lives.
In Q4, we have seen a notable shift in the rental environment which has gone from over 30% vacancies in some areas at the beginning of the year, to as low as 5% in Q3 & Q4. This trend is indicative of household inflation growing substantially this year to a point where many first time buyers are being driven out of the market due to the higher cost of living.
3 December 2021 marked the much awaited return of the only direct flight from the US to Cape Town, when United Airlines touched down for the first time since the onset of Covid-19 pandemic some 20 months ago. The significance of the event was somewhat subdued under the cloud of global uncertainty that the emergence from the Omicron variant, however, the return of the direct service from New York is an important catalyst that will invariably result in a return of foreign purchasers to our shores.
With the world where it is right now, it's anyone's guess what 2022 will bring for the Cape Town property market, but one thing is for sure, and that's the fact that we can expect the unexpected. Our market analysts at Quay 1 continue to actively monitor the trends in every market we operate to ensure that we remain nimble and implement the most effective tailored integrated marketing strategies on a local, national and International basis for every property we market, ensuring that we maximise our sellers returns in all market conditions.
This year, Quay 1 International Realty team is on track to hit over R700 million in sales turnover which has included a number of record sales and rentals in both the residential & commercial property space.
We would like to take this opportunity to thank all of our valued clients for their support and we look forward to continuing to Navigate Success for our sellers in the last stretch of the year and into 2022.
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Author: Quay 1 International Realty
