Growth in Cape Town’s luxury property market has dropped by over 50% the past year, but the market is showing signs of recovery, a new report says.
The Prime Global Cities Index by realtors Knight Frank, released on Thursday, show that Cape Town prime property growth slowed from 19.9% year-on-year to 8.2%. The report considers prime property the top 5% of a city’s housing market.
“The citywide drought and the uncertainty over the process of land expropriation without compensation have weakened sales activity,” the report says.
“However, six weeks of solid rainfall and new land guidance from the government has mitigated this concern and sales volumes are strengthening again.”
Cape Town is still the eight fastest-growing luxury property market on the index.
Only three cities achieved double-digit prime property growth the past year, compared to seven in 2017, the report notes.
The three cities with double-digit growth were Guangzhou, China (which grew by 11.9%), Singapore (up 11.5%) and Madrid, Spain (up 10.3%).
“The introduction of new, and the strengthening of existing, property market regulations, along with the rising cost of finance and a degree of political uncertainty is resulting in more moderate price growth at the luxury end of the world’s top residential markets,” the reports reads.
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