Cape Town’s rising property prices are making it harder for young South Africans to enter the housing market, especially in central areas.
Home values in the city have increased by 160% since 2010, according to Statistics South Africa.
Bloomberg reports that the Western Cape now attracts around 40% of national property sales over R10 million, with strong interest from foreign buyers.
Affordability remains a major challenge
Many young professionals, often referred to as Born Frees, are struggling to buy homes close to where they work. Studio apartments in the City Bowl are now selling for over R1 million.
Mfundo Mabaso, head of Home and Structured Lending at First National Bank, says the cost of property near job hubs is making it difficult for younger buyers to get a foot on the ladder.
Intergenerational wealth
Those without intergenerational wealth face added financial pressure. Many support extended families and do not have access to financial help when buying property.
Curtley Serfontein, a data analyst, lives 35 kilometres outside of central Cape Town because he cannot afford to rent closer. He looked into the First Home Finance subsidy but did not qualify.
Serfontein says that he is fully aware of the cost that would come should he want to move closer.
City takes steps, but the supply is limited
Cape Town’s geography restricts expansion in high-demand areas. The City Bowl is bordered by the ocean and Table Mountain, limiting development opportunities.
The City of Cape Town has released inner-city land in Salt River and Woodstock for affordable housing. It also launched a Development Charges Fund to help small developers cover infrastructure costs in nearly 200 lower-income areas.
Deputy Mayor Eddie Andrews says the City is working to speed up housing approvals and promote alternative building methods.
But the supply gap remains. ‘The main issue is that there is not enough housing supply on the market…I didn’t realise it would be this tough…And it’s the toughest in Cape Town, I think,’ says Andrews.
While banks are offering 100% home loans and group buying options, young people like Serfontein continue to save and hope.
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