The property market in Cape town, South Africa is starting to move again, buoyed by a surge in first-time buyers.
The level of first-time buyers in the Cape Town property market is a notable 3.3 times more than this time last year, auguring well for a gradual house price recovery in the next few months.
According to FNB economist Siphamandla Mkhwanazi, the latest property barometer of sub-regional indices (August 2019) shows that first-time buyer activity has increased in Cape Town largely because of the shift towards more favourable pricing.
FNB also reports that buy to let activity from both South African nationals and overseas property investors is also picking up; yet another factor paving the way for a market recovery. Currently, this sector of the property market accounts for 10.6 per cent of total sales, according to the FNB.
Dr Andrew Golding, chief executive of the Pam Golding Property group, said: ‘This influx of buyers into the market coincides with the change in season which traditionally sees more sales activity than during the winter months – particularly in the Cape Town area. Cape Town’s dams are also at more than 80 per cent capacity, a far cry from the water shortages that affected sentiment a year ago.
‘Coupled with the 6.6 per cent price growth in July (2019), ahead of national house price inflation of 3.9 per cent, positive news for property investors is that the Western Cape continues to lead the rebound in South Africa’s residential property market.’
This is echoed by FNB’s findings which show double-digit inflation for the more affordable sub-regions of the Cape Metro, such as Elsies River and the Cape Flats. While its house prices may be growing at the slowest pace in recent years, Cape Town is still the top performing major metro in the country, with an inflation of 4.4 per cent, and it is one of only two major metros above the national average.
Another positive highlighted by the latest FNB research is that the length of time a property is on the market before being sold has improved. Last year, the average time was 16 weeks. It is now just over 12 weeks.