Cape Town home prices increased by 10% (year-on-year) in the first quarter of 2018.
This is the seventh consecutive quarter of slowing growth.
Home prices in Cape Town grew by 15.6% (y-o-y) in the second quarter of 2016.
Prices in Cape Town’s most expensive area, the Atlantic Seaboard, rose by 111% in the past five years.
Melanie Rice interviewed FNB Property Economist John Loos.
Although the drought may have had an impact, Loos fingered affordability as the main reason for the slowing rate of home price growth in Cape Town.
Listen to the interview in the audio below (and/or scroll down for quotes from it).
First time buyers in Cape Town is struggling to get into the market more so than in the rest of the country.— John Loos, FNB
Drought has dampened sentiment towards the region…— John Loos, FNB
Cape Town has managed to create that perception [of a great city lifestyle] more than other cities in the country…— John Loos, FNB
The big driver in recent years is what we call ‘semigration’ [i.e. people selling homes in other provinces to move to Cape Town]… Cape Town has seen a strong net inflow for a good number of years…— John Loos, FNB
The rental market has been solid in Cape Town for some years…— John Loos, FNB
I don’t think it’s a great buying market [yet]… In the next year or two [it may become so]... Much depends on how much this market will slow down… it will also depend on the drought conditions… Another dry winter… may even cause recession… the weather is in the hands of the gods…— John Loos, FNB