According to the latest RE/MAX National Housing Report for Q2 2024, the Western Cape continues to dominate as the most searched province for property, claiming all five top spots on its website.
Property prices in this region are also notably higher compared to the rest of the country. For instance, while the average house price in Gauteng is around R1.4 million, the Western Cape averages R2.6 million in the same period.
Despite rising interest rates and sluggish economic growth affecting property sales in other areas, demand for homes in the Western Cape remains robust, driving prices even higher.
Louise Killeen, from RE/MAX, notes that interest rates have not had a significant impact on demand for homes in sought-after suburbs like Gardens and Tamboerskloof, both serviced by her agency in the Cape Town City Bowl.
“There is always more demand in these areas than there is supply,” Killeen said. She also highlights that home prices have shown substantial appreciation. “Listings here can range from around R5.5 million to as high as R24 million. It feels like we are entering a sellers’ market now, which could push prices up further.”
Properties in these areas are moving quickly. Killeen said that correctly priced homes spend about 42 days on the market on average over the past year. "Incorrectly priced properties, however, can linger much longer, with one property taking nearly a year to sell after a 25% price reduction. Pricing correctly is crucial," she said.
A similar trend is observed in Claremont, another of the top five searched suburbs for Q2. Kevin Jacobs, said: “demand in Claremont remains high due to a shortage of correctly priced properties.
The average price is around R3 million, with the market being split evenly between sectional title and freehold properties.
The average sales price has grown by about 7% over the past year, and correctly priced homes are selling within 5-8 weeks, Jacobs said.
Despite this demand, he said that many properties struggle to sell due to pricing issues. "Buyers are very price-conscious and would rather wait than bid on homes they believe are overpriced."
RE/MAX said that while most buyers are local, there is still strong interest from out-of-town buyers, particularly from upcountry and KwaZulu-Natal.
“At the higher end, demand from foreign buyers and those relocating within South Africa remains robust. Meanwhile, the sectional title market is largely driven by factors such as schools, universities, and first-time home buyers,” Jacobs said.
In suburbs like Gardens and Tamboerskloof, a notable portion of buyers are foreign nationals. "Data shows that since January, 17% of buyers in these areas have been foreigners, with 57% of sales being cash transactions.
Jacobs has also noticed a rise in new agents and agencies entering the market due to the high demand in these regions.
"Many of these newcomers face challenges in gaining traction and often resort to offering reduced commission rates to attract clients. However, established agencies with a proven track record continue to dominate the market. While discounting may appeal to some, agencies known for delivering professional and reliable service consistently achieve the best outcomes for their clients," Jacobs said.
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