House prices continue to rise and listing times drop as ongoing semigration fuels the market in Cape Town's Southern Suburbs

Since the revival of semigration in 2021, the surge in market activity in the Southern Suburbs has continued unabated with the steady rise in demand leading to a drop in the time properties are spending on the market as well as a declining gap between asking and selling price.

This is according to Claude McKirby, Co-Principal for Lew Geffen Sotheby’s International Realty in the Southern Suburbs and False Bay who adds: “We’ve been inundated by enquiries for both sales and rental properties as people looking to buy will often rent first whilst they search for a home to purchase, and well-priced family homes are often snapped up as soon as they’re listed.”

Three of the most popular suburbs due to their proximity to good schools and other top amenities are Newlands, Rondebosch and Claremont where demand is clearly evidenced by Propstats data which reveals steady price inflation and shorter listing times.

In 2021, houses in Newlands were selling at an average price of R6.5 million, an average 11.1% lower than asking price after 176 days on the market, although some properties were selling in under one month.

By November this year, the average selling price had risen to R8.15m at 7.5% below asking with listing days decreased to 76 although more properties are now selling within a week and many within two months.

In Rondebosch, the average house price in 2021 was R5.3m, 10.6% below asking and properties spent 124 days on the market. The current average selling price is R5.8m, 7.5% below asking and the average listing time is just 51 days.

Claremont’s 2021 average sale price was R4.34m, 8.3% below the asking price and properties spent an average of 77 days on the market. The average selling price has increased to R5.8m, just 6.4% below asking and houses here now spend an average of 69 days on the market.

“Stock has become an issue, though,” says McKirby, “and there are few houses available at the current average selling prices and almost none at the entry level.

“The rental market is equally competitive throughout the whole Southern Suburbs region and, with the current stock shortages, we are finding that free standing houses in the broad price range of R15 000 to R55 000 do not stay on the market for long.

“Properties have barely been listed and the enquiries literally pour in with some properties even being taken without viewings.  Generally, these are potential tenants from Gauteng or KZN or abroad.”

McKirby says that there has also been a notable uptick in enquiries in the scenic Peninsula coastal strip from Muizenberg to Noordhoek since mid-2021.

“This area not only offers the quintessential seaside village and outdoor lifestyle, it does so at more accessible pricing than most comparative coastal areas in Cape Town and it also offers a very broad selection of properties.

“The region is attracting both local and upcountry buyers as it not only offers the quintessential seaside village and outdoor lifestyle, it does so at more accessible pricing than most comparative coastal areas and it also offers a very broad selection of properties.

“The suburbs currently attracting the most interest from upcountry buyers, are Noordhoek, Kommetjie and Simonstown which all offer exceptional lifestyles although each has its own unique and distinct character. Muizenberg and Fishhoek are very popular with young families and first-time buyers.”

Semigration is not only driving the relocation of families to Cape Town, but also businesses, and this has resulted in a spike in the demand for business premises, both to buy and to rent.

“Over and above the migration of families, the market’s upward trajectory has been driven by several other factors, including the city’s status as a global business and tourist destination and increased investment in infrastructure which have underpinned a notable upward trend in sales volumes.”

According to year-on-year data from the Deeds Office for 54 suburbs in Cape Town, for the 12 months ending:

• December 2022, 777 units had been sold at an average sale price of R7,762 million and a combined sales value of R6,031 billion.
• March 2023, 959 units had been sold at an average sale price of R6,932m and a total sales value of R R6,648 bn.
• June 2023, 1155 units had been sold at an average sale price of R6,434m and a total sales value of R7,432 bn.

“Sales volumes therefore increased by a solid 20% and 23%, and sales units increased by 11.8% and 10.2%,” says McKirby.

Despite the current eco-political climate in South Africa, McKirby doesn’t expect the burgeoning market in Cape Town to slow down any time soon – if anything, he expects the opposite.

“Cape Town not only has a high service delivery rating, it also experiences less loadshedding than the rest of the country and, with the local government on track with their scheme for commercial property owners to supply own solar generated power back to the local grid, the future is certainly looking brighter here in the Cape.”