Rainmaker Marketing, a global property and lifestyle marketing agency, has unveiled its latest Property Market Report focusing on the Western Cape.
The report delves into the burgeoning real estate scenes of Somerset West and Stellenbosch, offering insights into semigration patterns, regional economic outlooks, building plan activity, and a comprehensive overview of the province’s property market.
Addressing semigration and relocation trends in South Africa, Stefan Botha, Director at Rainmaker Marketing, pointed to the Western Cape's prominence in attracting individuals and businesses seeking to relocate.
Factors such as quality of living, good governance, security, and significant infrastructure investment are driving forces behind this trend, shaping the region's economic landscape.
“It is evident that the Western Cape enjoys the lion’s share of semigration and as a result, must cater to the shift in the market’s needs. The province has driven international and local investment and has set the standard of living in South Africa through its excellent service delivery, lower unemployment rates, mushrooming business hubs, medical and educational institutional offerings, and forward approach to energy efficiencies,” he said.
The report also sheds light on the Western Cape's ambitious 10-year growth plan, projecting a 1.9% expansion in 2024.
With a thriving tourism sector and strategic investments in infrastructure, including a comprehensive R120 billion investment plan, the province is poised for sustained growth and development.
Building activities in the Western Cape surpass national averages, with building plans passed totaling R30 billion between January and November 2023. Completed buildings reached R25 billion, marking the highest figure in South Africa and highlighting the region's attractiveness for development and investment.
Somerset West and Stellenbosch emerge as high-potential growth areas within the Western Cape, as outlined by Brenda Padayachee, Head of Market Research at Rainmaker Marketing.
The report indicates significant growth in the adult population of these towns, with buyer activity driven by factors such as quality healthcare facilities and suitability for mature living.
Despite differences in property transactions, both towns exhibit consistent growth trends. Stellenbosch commands higher prices within estates, with sectional title units and freehold homes seeing premiums compared to properties outside estates.
According to the report, the adult population within these towns are growing significantly with 53 new families moving into the area monthly.
Buyer activity in Somerset West (54%) and Stellenbosch (45%) is notably higher among those aged 50 to 65+, drawn by factors like quality healthcare facilities, estate offerings and suitability for mature living.
In terms of housing stock, Stellenbosch has seen an 18% increase while Somerset West saw a more modest 6% rise in new stock since 2021.
“Properties within estates in Stellenbosch command higher prices, with sectional title units and freehold homes seeing premiums of 12% and 35%, respectively, compared to properties outside estates.
"Somerset West consistently outperforms Stellenbosch in total property transactions, but Stellenbosch shows consistent growth in both volume and value of sales. The average value per sale in Somerset West saw a 17% increase in 2023,” said Padayachee.
The report confirms rising sectional title prices per square meter across all towns, with Stellenbosch commanding a premium over Somerset West, reflecting unique market dynamics identified in Rainmaker Marketing's analysis.
Looking ahead, the report points to promising shifts in market sentiment, particularly with the anticipated decrease in interest rates expected in the third quarter of 2024, which may signify the peak of the interest rate cycle and usher in a period of optimism, especially in regions such as Stellenbosch and Somerset West, where heightened sales volumes are projected.
Additionally, the planned R7.7 billion expansion of the Cape Winelands Airport projected to open in 2027 and broader infrastructure investments in the Western Cape, supported by an estimated R120 billion investment by the City of Cape Town, are poised to catalyse significant economic growth, connectivity improvements, and enhanced desirability, said Botha.
"Property development trends indicate sustained demand for sectional title properties within estates, mixed-use developments, and increasing integration of technology, all underpinned by a growing emphasis on sustainability.
"Features like back-up power and solar-ready units are becoming standard, alongside a greater focus on energy-efficient systems and water-saving measures. The rise of green bonds offered by banks further highlights the sector’s commitment to sustainability, reshaping the real estate landscape towards more environmentally conscious practices,” he said.
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