Your 2022 Cape Town property market year in review
Category Cape Town Property Market
The year 2022 brought with it a multitude of peaks and troughs. Some of the most significant factors that impacted the Cape Town property market included semigration, interest-rate hikes, inflation, investment-yield increases, bullish banks, a weak rand, and the reopening of the economy post-Covid-19.
Within the first nine months of 2022, the number of residential building plans passed in the Western Cape accounted for 37.8% of the national total. Gauteng posted a -7.9% year-on-year decline in residential building plans passed for Q3. While KZN posted a decline of -11.8%. This in contrast to the Western Cape that showed a 36% increase in the number of plans being passed during the same time frame.
The relatively high levels of activity relating to the Western Cape residential building plans are a clear indication that semigrant demand is strong and set to stay that way in 2023, which should bode well for the residential market in particular.
Rising interest rates and historically high inflation have played a significant role in the Cape Town property market this year. Given that household income has been put under pressure, many Capetonians have been forced to rent. To highlight this trend, more than 40% of rental properties were vacant in certain areas in the Western Cape at the beginning of the year, by December this figure had dropped to less than 5%. The influx of tenant demand has encouraged high-yield-seeking investors to buy-to-let, while developers have jumped on the band-wagon building micro-apartments at affordable prices with strong yield potential. The bank's relatively relaxed lending policies have supported this investment trend, in some cases covering 108% of the purchase price.
With a renewed post-Covid-19 economic sentiment in the air, investors have increasingly been snapping up inventory in the high-end sector of the market this year. Foreign buyers have also played an active role in the R5 million-plus property range as the rand's strength fell approximately 20% when compared to most developed-economy currencies at the beginning of the year, providing purchasers with increased buying power as a result.
As a company, Quay 1 has expanded into most key areas within the Western Cape and has been fortunate to serve more than 2 500 buyers, sellers and tenants this year, amounting to over R1.2 billion in sales turnover.
As Cape Town's fastest-growing property brokerage, our team of analysts and professional brokers remain committed to keeping you up to date with the latest news, market trends and property updates in your area to ensure that you are kept abreast of your property asset's performance in 2023.
We wish you a joyous festive season and look forward to serving your real estate needs in the new year and beyond.
Interested to know what your Cape Town property could be worth? Click on the link below and one of our area specialist brokers will be in contact.
Author: Quay 1 International Realty
