New data from Statistics South Africa (StatsSA) shows that since 2010, property prices in the country have increased by 98%, with the City of Cape Town showing the most significant surge at 141%.
“Since August 2014, price increases in Cape Town have been consistently higher than in other metros. After remaining relatively flat in 2018 and 2019, prices surged further,” reported the statistics agency.
The latest reports compared eight metropolitan municipalities across nine provinces measuring changes in residential property prices through a new set of residential property price inflation (RPPI) metrics.
The RPPI measures the change in prices for houses, townhouses and flats that private individuals purchase.
On the opposite end of the scale, Johannesburg reported the slowest increase in property prices since 2010, with residential property prices rising on average by 71%.
On average, all metros saw a 98% increase in property prices.
StatsSA provided the following breakdown of the metros:
- Cape Town: +141%
- All Metros: +98%
- Ekhuruleni: +94%
- Tshwane: +91%
- Buffalo City: +89%
- eThekwini +80%
- Nelson Mandela Bay: +77%
- Mangaung: +72%
- Johannesburg: +71%
According to StatsSA, the most recent RPPI shows that nationally, in the 12 months to November 2022, property prices increased by 5.8%
“Prices increased by 7,4% in Western Cape and by 3,6% in Gauteng over this period,” said StatsSA.
In November, the City of Cape Town and Ekurhuleni were the main contributors to the annual inflation rate for all metropolitan areas.
The graph below illustrates the average annual residency property price inflation for South Africa as a whole:
Cape Town’s boom
Anecdotally across the country, Cape Town’s property boom is no surprise, with semigration to the Western Cape boosting property demand and international buyers also taking an interest.
In terms of the latest Rode’s Report on the South African Property Markets for 2023, the Western Cape has come out on top in the first quarter of this year on a regional level with its lower residential vacancy rate compared to other areas.
On top of being a hotspot for residential development, the commercial side of Cape Town is also seeing significant development, with more businesses moving to the city and, in turn, attracting more job seekers.
Brent Townes, the COO for commercial property at Lew Geffen Sotheby’s International Realty, said that semigration is not the only driving factor for families, as the area is also becoming an economic heavyweight.
Many people are also flocking to the Cape due to improved service delivery provided in the area. The Auditor-General recently reported that only 41 of the country’s 257 municipalities received clean audits – 22 of the 41 are in the Western Cape.
Another point of interest is that, more often than not, Cape Town boasts lower load shedding stages than the rest of the country – thanks to hydroelectricity from the Steenbras Dam.
Cape Town aims to provide at least four stages of load shedding protection over the next three years, reported Rodes.
Some of its plans include buying power on the open market, paying businesses and residents to sell power back to the city, and solar farms and gas projects, said the property firm.