FNB has released its Cape Town property barometer for the first quarter of 2018, and it shows which suburbs in the city have seen the most growth.
The barometer found that while majority of regions show relatively strong growth, eight out of the twelve defined sub-regions saw their year-on-year growth slow in the first quarter of 2018. The slowest growth rate is recorded in the City’s most expensive and illustrious region – the Atlantic Seaboard.
In an interview with BusinessTech, FNB’s property sector strategist, John Loos, said the more affordable regions are showing a less blatant slowing trend than the high-priced end, while certain regions are showing an acceleration in price growth. This may be a result of the relatively unaffordable price of property in higher-priced regions, and may also be encouraging a search more relatively affordable property in other sub-regions.
The first quarter of 2018 saw growth slowing in house prices in the City Bowl, as well as the three other major sub-regions surrounding it.
These sub-regions (near the City and the mountain) have shown some of the strongest house price inflation rates in the past five years, and this deterioration in home affordability seems to have led to a slump in demand, and thus price growth rates.
The Atlantic Seaboard has seen the sharpest slump in growth, with a revised multi-year high of 27.5% year-on-year in the final quarter of 2016, to 2.3% by the first quarter of 2018.
The City Bowl started its price growth slump before the Atlantic Seaboard, and has gone on from its revised multi-year year-on-year growth high of 23.% in the second quarter of 2016 to 10.0% by the first quarter of 2018.
The Southern Suburbs, which is one of the most expensive sub-regions, saw a slowdown in price growth as well, going from 10.1% in the previous quarter to 8.4% in the first quarter of 2018. This shows a gradual slowdown of growth from a multi-year high of 16.1% in the second quarter of 2015.
The most affordable sub-region within proximity of the City Bowl, the Near Eastern Suburbs subregions, which includes areas like Woodstock and Salt River, shows the fastest price growth of these major four sub-regions.
The proximity to the City Bowl, as well as the Claremont Business Node, is becoming increasingly important as the city’s traffic congestion begins to deteriorate.
Rapid price inflation has been seen in other areas further from the City, including the Western Seaboard Sub-Region, which includes areas such as Blouberg, Milnerton and Melkbosstrand, as well as the Cape Flats.