According to the 2018 general valuation roll released by the City of Cape Town recently, homes in Cape Town are worth 34% more than they were three years ago. The city’s five modelling categories are based on market data and sales, which are used by the city’s valuation office.
However, this figure has certainly been met with a lot of concerns within the industry both from agents and real estate experts. At Harcourts we’ve undoubtedly experienced some regions in Cape Town showing impressive growth compared to the 2015 roll yet overall, property values have declined in the past 12 to 18 months. Indicative of these concerns is that some of our offices are finding municipal valuations are much higher than the actual market value.
Both internal and external factors have influenced the Cape Town property market; economic pressures on consumers impacting demand, the water crisis in the province and factors such as volatile economic market conditions. These factors play a major part in how buyers and sellers perceive the state of the market and this has an immediate influence on market value.
It is always difficult to analyse and summarize an entire property market across a wide region due to the intricacies of the local landscape. It has to be understood that the wide variety of properties across the city present different opportunities, therefore activities vary greatly. However, from a holistic perspective, the market has undoubtedly declined since mid-2017 with prices remaining relatively unchanged during this period.
It is imperative to note that going forward the market will change. We’ve seen stabilisation in previously unpredictable areas and with the water crisis stabilising also investment confidence will return. However, Eskom’s woes need to be rectified as a matter of urgency as foreign investor confidence is being dramatically reduced due to our national electricity crisis. This factor could play a major part in the value of property in the near future.
The 2018 valuation roll was released last month and homeowners were notified in February so they could inspect the roll and raise objections. Objections can be submitted until 30 April 2019. Visit: http://web1.capetown.gov.za/web1/gv2018/SearchProperty for more information.
Harcourts Africa Chief Executive Officer