Favourable market for sellers and investors

The latest property data from Cape Town shows that the market is exceptionally favourable for sellers and investors with booming demand and properties selling quite fast while sellers are achieving good prices.

Recent Lightstone data shows that coastal property continues to perform better compared to inland property with Cape Town achieving average YoY price growth of 8.0% compared to 4.0% for inland property. Cape Town in particular remains well ahead of anywhere else in the country with many areas outperforming these average growth rates driven by high demand from both local and international buyers.

The depleting stock levels have created unprecedented opportunities for sellers to come into the market and achieve excellent prices. The buoyant rental market is further adding to the demand, and great news for investors looking to capitalise on the opportunity to earn steady rental income streams. The latest TPN Rental Monitor report shows that the Western Cape consistently records the lowest vacancy rate. The City also offers some of the best rental growth rates in the country, making rentals an attractive investment option.

As a growing city, Cape Town continues to evolve and expand, with areas upgrading and new developments. The COCT (City of Cape Town) is actively supporting the growth and development with various initiatives aimed at facilitating both large and micro-developments. These create significant opportunities for property owners to unlock value from their existing properties, and for investors to capitalise on the development opportunities.

For homeowners, opportunities include subdivision which allows a single property to be divided into two or more new, separate plots, each with its own title deed, creating new standalone properties for sale or development. Additional By-law amendments facilitate up to three dwellings on a single erf as an "additional right," eliminating the need for a lengthy and costly rezoning process. Separate ownership or selling one or more of the units will, however, require a sectional title register.

COCT has also introduced laws to incentivise micro-development in certain areas while also streamlining administrative processes, offering pre-approved building plans for micro-developments, and improving its digital submission systems to facilitate faster building approvals.

Also of note is the news that the Urban Development Zone (UDZ) Tax Incentive has been extended to 2030. This benefit, however, is only available to developers in certain designated zones as part of the government's long-term commitment to urban regeneration. Within Cape Town, areas zoned under the UDZ tax incentive include from the CBD to Woodstock, Salt River and Observatory.

Generally, the convergence of strong market demand, excellent price growth, and supportive city regulations makes Cape Town an ideal market for developers, investors, and sellers right now. Whether you are looking to list your property to capitalise on its value, or invest for lifestyle and solid growth or lucrative rental returns, Cape Town remains a safe bet.

Please feel free to contact us if you would like to chat about your property aspirations, or discuss opportunities available in the current market.

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