Cape Town continues to dominate South Africa’s residential property market in 2025, outperforming all major metros with an impressive 8.5% annual price growth.
This far exceeds the national average of 5.2%, making Cape Town not only the most expensive city for real estate in South Africa but also the fastest growing.
As of mid-2025, the average residential property in Cape Town is priced at R3.5 million, with prime suburbs like Clifton and Camps Bay commanding more than R31,000 per square metre, notes TheAfricanvestor.
In contrast, Johannesburg and Durban lag behind, with prime property prices averaging R14,000/m² and R10,880/m², respectively.
Several key factors are propelling Cape Town’s property growth:
1. Foreign Investment
Cape Town saw over R1 billion in foreign property purchases in just the first five months of 2025. International buyers – particularly from Germany, the UK, the Netherlands, Switzerland, and the US – now account for 67% of all sales in prime areas like the Atlantic Seaboard and City Bowl.
According to Seeff Property Group and PropStats, in 2024, a record 130 plus properties worth more than R20 million were sold in Cape Town — up from 96 in 2023 and the previous high of 120, recorded during the post-pandemic rebound in 2022.
2. Semigration & Domestic Demand
There’s a steady stream of professionals and retirees relocating from Gauteng and KwaZulu-Natal, seeking Cape Town’s better quality of life, governance, and amenities.
This migration is tightening demand and raising prices in both established and emerging neighbourhoods.
3. Interest Rate Cuts
After peaking in 2023, the South African Reserve Bank began cutting interest rates in late 2024. With the repo rate now at 7.75%, affordability has improved dramatically.
Home loan applications are up 10% in 2025, boosting sales and compressing days-on-market in high-demand areas.
4. Limited Supply in Prime Areas
Natural geography, zoning regulations, and heritage protections mean there’s very little developable land left in Cape Town’s most desirable suburbs.
This scarcity ensures sustained upward pressure on prices especially for sea-facing and mountain-view properties.
Cape Town’s property growth isn’t evenly spread – some areas are outpacing others by wide margins.
| Area / Type | Avg Price/m² | Comments |
|---|---|---|
| Atlantic Seaboard | R35,000+ | Highest growth, limited stock |
| City Bowl | R31,000 | High rental demand, digital nomad hub |
| Woodstock / Salt River | R18,000–22,000 | Gentrification, yields >8% |
| Green Point / Sea Point | R28,000+ | Strong urban amenities |
| Century City | R26,000+ | Mixed-use, infrastructure growth |
| Sectional Titles (overall WC) | R28,114 | Outperforming freeholds |
Here’s how Cape Town stacks up against other metros:
| City | 5-Year Growth | 10-Year Growth | Avg Price/m² (2025) |
|---|---|---|---|
| Cape Town | +30% | +141–147% | R31,000 (prime) |
| Johannesburg | +8.6% | +71% | R14,000 |
| Durban | +16.4% | +80% | R10,880 |
| National Avg. | +23.8% | +98% | R15,500 |
A home bought in Cape Town for R2 million in 2015 is now worth nearly R5 million. That same home in Johannesburg would only be worth R3.4 million.
Market experts predict moderate, sustained growth of 3–7% per year, with prime areas reaching 8% or more depending on buyer sentiment and further rate cuts.
The combination of strong fundamentals and stable governance in the Western Cape makes Cape Town one of Africa’s safest bets for residential real estate investors, TheAfricanvestor said.
Property bubble?
A housing bubble occurs when property prices rise rapidly to unsustainable levels, driven by speculation and inflated demand—eventually outpacing fundamentals.
Once demand slows or economic conditions shift, prices typically correct or fall, sometimes sharply.
So far, it said there’s little evidence of a property bubble. Price growth is underpinned by real demand – not speculation. Unlike boom-bust cycles elsewhere, Cape Town’s market reflects:
- High occupancy rates
- Long-term lifestyle migration
- Limited inventory
- Foreign capital inflow
Signs point to continued momentum in Cape Town’s property market. While much of the country struggles with corruption, bankrupt municipalities, and deteriorating service delivery, Cape Town stands apart — supported by stable governance, sound infrastructure, and effective urban management.
But rapid growth brings its own pressures. “Infrastructure and spatial planning are critical as we see densification in areas like the West Coast, Sunningdale, Blouberg, and Hout Bay. These areas are experiencing significant growth, primarily driven by semigration. We’re observing similar trends in George and Mossel Bay as well,” said Grant Smee, CEO of Proptech and digital agency Leadhome.
