Buoyed by the ongoing demand for an enviable coastal lifestyle, the housing markets of towns in the Western Cape and Eastern Cape have become drivers of property price growth over the past 12 months.
A perennial top performer, the Western Cape has seen a 10% increase in property prices from August 2022 to August this year, says Bradd Bendall, Head of Sales at BetterBond. The province recorded the largest average home price increase over this period – 35% higher than the national average.
While this performance is not unexpected in the Western Cape, the country’s semigration hotspot accounting for 35% of all buyer relocation activity in the past year, it is noteworthy that the neighbouring Eastern Cape is showing similar house price growth. According to the September 2023 BetterBond Property Brief, house prices in the Eastern Cape have increased by just over 8%, recording the second-highest increase year-on-year.
“The rise of the Eastern Cape, notwithstanding its natural beauty, unspoilt coastline and enviable lifestyle, seems almost counterintuitive,” notes Bendall. Lightstone has reported that the province is one of the most undesirable in the country, with slow population growth and limited economic opportunities. However, the Eastern Cape’s property boom is being driven by its smaller seaside towns offering great lifestyles for families relocating from Gauteng and other provinces.
Lightstone reported in July that property prices in the Eastern Cape are highest in its smaller towns. Homes are selling for an average of R2.4 million in Cape St Francis and R2.1 million in St Francis Bay. “St Francis has seen a massive influx of new families moving into the area as semigration continues,” says Barry Davies, Chief Operating Officer of Chas Everitt.
Another popular holiday destination is Port Alfred, where the average sales price is R1.5 million, adds Bendall. By comparison, average house prices in Gqeberha are considerably lower at R840 000, according to data from Property24.
While the Eastern Cape’s remarkable performance in terms of house price growth and sales volumes comes off a relatively low base, the Western Cape is a long-term top performer. Davies says markets in this province attract buyers in the higher price bands. Cape Town is home to some of the country’s most upmarket residential areas, including Clifton and Bantry Bay on the Atlantic Seaboard.
The province also attracts high-net-worth individuals who are able to spend many millions on property. These buyers also look to the picturesque Boland towns of Franschhoek, Paarl and Stellenbosch in the Cape Winelands area. The coastal town of Hermanus is the fastest–growing area in the province for high-net-worth individuals, according to the Africa Wealth Report for 2023 published by Henley & Partners and New World Wealth.
Known for its efficient service delivery and economic opportunities, the Western Cape has become the province of choice for home buyers looking to relocate. It is also home to many excellent schools, some of our country’s best tertiary institutions and world-class medical facilities. Many of these assets are in Cape Town, rated by municipal financial sustainability index, Ratings Afrika, as among the top performing municipalities in the country.
George and Mossel Bay also scored well, ranking first and third. As a result, these coastal towns have also enjoyed considerable growth in recent years, notes Bendall, especially as hybrid working arrangements have become common practice for many. A renovated home at the Point, in Mossel Bay, recently sold for R39 million, the highest price ever in the area.
No longer viewed only as holiday destinations, these popular coastal towns offer enviable lifestyles and competitive property prices, says Bendall. Although demand is driving house price growth, with Lightstone reporting a 7% price inflation of coastal properties compared with the 2.4% growth of prices of inland properties, they are still accessible to many buyers.
“With so much to offer, from natural beauty and amenities to reliable infrastructure and efficient service delivery, it’s understandable that the number of people relocating to the coast has increased from 31% in 2018 to 46% currently.”
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