The adage “location, location, location” remains as relevant today as ever — underscoring the fact that location is the most critical determinant of value and long-term performance in real estate investment decisions.

While many buyers focus primarily on the size or design of a home, Jawitz warns that prioritising the physical structure over its location is a common misstep.

Firstly, there are economic factors at play, and location has a direct impact on your property value and future resale potential. There’s also a complex set of factors that go into determining which areas are “good” investments and which are less optimal, it said.

It notes that a home can be renovated – but the location is permanent,” the firm says. “Simply put, an average property in a great location will earn you a higher return on your investment than a great property in an average area.”

At the heart of location’s importance is the basic principle of supply and demand. Properties in high-demand areas — particularly those with limited land availability, strong governance, and lifestyle appeal — tend to appreciate faster.

For instance, homeowners in much of the Western Cape have enjoyed substantial price growth in recent years, driven by sustained semigration trends and investor interest in the province’s relative economic stability.

However, Jawitz cautions against assumptions. “Every neighbourhood is different, even within the same city or precinct. Make sure to weigh up the pros and cons of the specific area you’re considering, and always do your due diligence.

“Ask your property practitioner for data on how property values have performed in that particular neighbourhood over recent years.”

There’s no universal formula, but key factors often include accessibility, proximity to amenities (such as top schools or transport infrastructure), safety, aesthetic appeal, and planned infrastructure or commercial development.

“It’s essential to evaluate each area on its own merits and understand what drives demand and value in that specific neighbourhood.”

Jawitz highlights areas such as Noordhoek, Scarborough, and Simon’s Town in Cape Town’s South Peninsula as examples. Though geographically removed from the CBD, they have become highly sought-after for their natural beauty, lifestyle offerings, and community feel – proving that demand is often shaped by more than just proximity to the city centre.

A “good” location is characterised by strong demand, limited supply, and a unique set of lifestyle or investment advantages,” the company said.

Real estate is a long-term investment and it’s important to learn everything you can about how the area has developed over time and what the plans for its future are.