As the year draws to an end, Cape Town has emerged as the top performing metro in the country, with an average year-on-year house inflation growth rate of 11.8 percent. This phenomenal performance is owing to investor confidence and a large number of people moving into the city.
The influx of people moving into Cape Town from provinces around South Africa, including Gauteng and KwaZulu-Natal is a result of good city management, advanced improvement to infrastructure, lucrative job opportunities and a bustling residential market that delivers a high return on investment.
Southern Suburbs valuation growth
Cape Town as a whole has experienced phenomenal residential valuation growth, and placing a spotlight on the Southern Suburbs reveals just how remarkable this growth has been.
In 2007, the average freestanding home in Newlands was worth R2.8 million and this amount surged to R6 million in 2016, increasing on average by R3.2 million within nine years. The value of apartments in the area increased on average by 1.1 million.
Freestanding homes in Bishopscourt and Claremont have also seen high property valuation growth, increasing on average by R6.8 million and R1.7 million, respectively.
The high demand for residential properties in the Southern Suburbs has led to it generating an excellent return on investments.
The main appeal of the area lies in its close proximity to the city centre and its wide selection of commercial hubs and lifestyle attractions, such as the V&A Waterfront and Canal Walk Shopping Centre.
Cape Town’s investment appeal
The investment appeal of the city has led to massive construction projects worth a total value of R4.6 billion, with an additional R3 billion in the planning stages. Over the next three years, it is estimated that the city’s overall property valuation will be over R34 billion.
Mixed-use developments grow in popularity
The predominant property type burgeoning around the city is mixed-use developments. These developments promote the concept of ‘live, work and play’ by fusing residential, commercial, industrial, cultural and institutional developments under one precinct.
Mixed-use developments currently underway in Cape Town include Goldies, a 36-storey building located on Buitengracht Street. Spanning 32 000 sqm, it is ideally situated in an emerging financial district within the City’s CBD.
Goldies will house 2000 sqm retail space, 10 000 sqm residential units in a prime position; overlooking the Harbour, and 20 000 sqm of sectional-title office space which will face the position of Table Mountain.
Zero2ONE is the new skyscraper planned for Strand & Adderley Street, near Cape Town’s Central Station. It is poised to become the tallest building in Cape Town, towering 42 storeys high. The mixed-use development will comprise of 624 apartments, 6000 sqm of retail space and 760 parking bays.
Reinforcing this investor confidence, the provincial government has implemented a large-scale fibre optic broadband programme to increase internet connectivity. Inclusivity is also a major objective of this initiative, and the city has created in excess of 270 public Wi-Fi zones, with plans to establish 60 more in 2017.
The next seven years will see the creation of the Municipal Broadband Network, a R1.7 billion project that will create a conducive environment for tech-based businesses.
As Cape Town’s population size and property market continues to grow despite a sluggish national economy, homebuyers, investors and developers are flocking to the city to take advantage of the buoyant market that delivers an exceptionally high return on investment.
It will be interesting to see how investor confidence will transform the face of the Mother City as new developments continue to burgeon across its skyline.