The Western Cape average house price growth has, since the first quarter statistics reports, shown the most significant growth since the bottom fell out of the property market in 2007. Already in the first quarter of 2012 the property prices in the Western Cape showed an increase – year-on-year – of 8.2%, ahead of all other South African provinces.
As reported in FNB’s House Prices Report of 2012’s first quarter the national average of year-on-year growth reached 8%. Gauteng has shown the most accelerated and consistent growth in house prices, reaching 6.8% at the end of the first quarter. The Limpopo, Mpumalanga, North West, Free State and the Northern Cape provinces recorded a 7.6% growth, while Kwa-Zulu Natal and the Eastern Cape lagged behind with only 4.5% and 5.8% growth shown respectively. This is largely as a result of the fact that the coastal regions are mainly manufacture-driven economies as opposed to the more service-driven industries of the interior provinces. The more minor provinces of Limpopo, Mpumalanga, North West, Northern Cape and the Free State seem likely to grow even more as a result of the residential and economic expansion from the mining and power supply industries in these areas.
According to ABSA’s house price index report in July this year bond applications within the middle segment of the market have shown a steady increase, further demonstrating the steady development that was shown in the first quarter of this year.
The Western Cape’s popularity and property market appears to be flourishing as a result of the number of buyers streaming into the area. While the province was traditionally considered a holiday destination, more and more buyers are looking to invest in retirement homes in the province’s scenic coastal areas. The appeal lies in the value for money that these properties provide as well as the relaxed coastal lifestyle while also providing major amenities and necessities close by.
Estate agencies within the Western Cape municipalities say that most properties are bought by cash buyers looking to spend between R1-million and R3.5-million, and are looking to retire or semi-retire on the West Coast. New developments like the West Coast Mall in Vredenburg as well as the Netcare Blouberg Hospital have attracted buyers by creating a shift in perception of coastal living.
Areas in the Western Cape that are showing a particular boom of property sales include Langebaan, where particularly people from Gauteng enjoy the quiet streets and low-crime levels. Velddrif is another town well-liked amongst buyers as it includes the Port Owen Marina as well as very reasonably priced beachfront plots.
The Western Cape also offers bustling metropolitan life, and many buyers from Gauteng relocate to Cape Town. Properties within secure estates are particularly sought-after, and suburbs like Big Bay, Sunningdale and golf estates sell many houses and apartments to buyers. As within most areas of the property market, reasonably priced homes priced between R1.2-million and R1.8-million are snapped up quickly.
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