Luxury Cape Town property growth has halved in the past year – but the market is showing signs of recovery
- Cape Town luxury property growth dropped by over 50% the past year, a new report says.
- The drawn-out drought and threat of land expropriation appears to be factors influencing sales.
- Globally, the luxury property market as shown lacklustre growth with only three cities showing double-digit growth.
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%).
See also: SA real house prices are in decline - and it now takes more than four months to sell a property
“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.
Receive a single WhatsApp every morning with all our latest news: click here.
Also from Business Insider South Africa:
- Headhunted black executives are offered 10% more than white peers in SA – but the premium is shrinking
- Fast food deliveries are exploding in South Africa - here are the winners
- These 6 types of property will likely be the first expropriated - here's why
- South Africans may soon be able to pay bills, buy clothes and get flight tickets through WhatsApp - here’s how it’ll work