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Rainmaker Marketing releases Western Cape Property Market Report

Rainmaker Marketing director Stefan Botha.

Rainmaker Marketing director Stefan Botha.

5th April 2024

By: Sabrina Jardim

Creamer Media Online Writer

     

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The Western Cape enjoys the lion’s share of semigration activity in South Africa and, as a result, has to cater to the shift in the market’s needs, says global property and lifestyle marketing agency Rainmaker Marketing director Stefan Botha.

He was commenting on the publication of the agency’s second ‘Property Market Report’, which delves into the fast-growing real estate landscape in Somerset West and Stellenbosch, in the Western Cape, and offers insights into semigration patterns, a regional economic outlook, building plans activity and a holistic take on the property market in the Western Cape.

“It is evident that the province has driven international and local investment and has set the standard of living in South Africa through its excellent service delivery, lower unemployment rates, mushrooming business hubs, medical and educational institutional offerings and forward approach to energy efficiencies,” says Botha.

The report, which used statistics sourced from Lightstone Data, highlights the allure of the Western Cape, with semigration trends showing an increase of 31% in 2020 to 46% in 2023 of those moving into the province.

Factors such as quality of living, good governance, security and substantial infrastructure investment are what seem to be driving individuals, families and businesses to relocate to the region. This shift in population dynamics presents both challenges and opportunities for the local economy, shaping the region’s growth trajectory, the company says.

“By considering factors like demographics, infrastructure, amenities and economic indicators – we have identified Somerset West and Stellenbosch as two high-potential growth areas,” explains Rainmaker head of market research Brenda Padayachee.

According to the report, the adult population within these towns is growing significantly with 53 new families moving into the area monthly. Buyer activity in Somerset West – 54% – and Stellenbosch – 45% – is notably higher among those aged 50 to 65 and over, drawn by factors such as quality healthcare facilities, estate offerings and suitability for mature living, the company says.

In terms of housing stock, the company notes that Stellenbosch has seen an 18% increase while Somerset West saw a more modest 6% rise in new stock since 2021.

“Properties within estates in Stellenbosch command higher prices, with sectional title units and freehold homes seeing premiums of 12% and 35%, respectively, compared to properties outside estates. Somerset West consistently outperforms Stellenbosch in total property transactions, but Stellenbosch shows consistent growth in both volume and value of sales. The average value per sale in Somerset West saw a 17% increase in 2023,” adds Padayachee.

The report confirms that sectional title prices per square metre have risen consistently across all towns, with Stellenbosch commanding a premium of 50% to 62% over Somerset West, reflecting unique market dynamics.

Looking forward, Botha says “promising shifts” in market sentiment are on the horizon, particularly with the anticipated decrease in interest rates expected in the third quarter of this year, which may signify the peak of the interest rate cycle and usher in a period of optimism, especially in regions such as Stellenbosch and Somerset West, where heightened sales volumes are projected.

Additionally, he points out that the planned R7.7-billion expansion of the Cape Winelands Airport, which is projected to open in 2027, and broader infrastructure investments in the Western Cape, supported by an estimated R120-billion investment by the City of Cape Town, are poised to catalyse significant economic growth, connectivity improvements and enhanced desirability.

“Property development trends indicate sustained demand for sectional title properties within estates, mixed-use developments, and increasing integration of technology, all underpinned by a growing emphasis on sustainability.

“Features like back-up power and solar-ready units are becoming standard, alongside a greater focus on energy-efficient systems and water-saving measures. The rise of green bonds offered by banks further highlights the sector's commitment to sustainability, reshaping the real estate landscape towards more environmentally conscious practices,” concludes Botha.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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