According to The State of Cape Town’s Central City Report, the 1.6km² Cape Town CBD contains 209 eateries, 96 medical practices, 69 bars and clubs, 627 retail outlets and 40 health and beauty facilities – however, the majority of middle income workers, many who work in the area, can’t make use of these facilities outside of their working hours.
This is because this demographic can’t afford to own homes in or around the City, which means additional, costly and time consuming trips to and from the CBD.
The average price of an apartment within the 57 residential complexes in the Central City is R2.337 million, according to the Cape Town Central City Improvement District’s (CCID) report. With middle income earners making between R15,000 and R50,000 per month (according to figures from the Unilever Institute of Strategic Marketing at UCT), they can only afford a maximum home purchase price of R1.5 million – leaving no entry point into the CBD property market.
With Property 24’s Property Trends and Statistics for the Cape Town City Centre showing that the average asking prices for a studio apartment is R2.640 million, R2.833 million for a one-bed and R5.305 million for a two-bed, it is clear that property developers in the CBD are currently only catering for upper-income earners.
The addition of nine new residential property developments cited in the CCID’s Report, with apartments prices starting at just over R2 million on average, means this market is in actuality being over-catered for.
Many middle income bracket earners are forced to purchase property on its outskirts, without the access to more affordable homes in well-located areas of the City. This matches the research contained in Standard Bank’s Consumer Expenditures Trends Report, which found that this market tends to spend 15% and 19% of their budget on transport.
It was stated that “this group will also be affected mostly by an increase in the fuel levy and currency weakness” in the Standard Bank Report. With the country’s current economic situation and the Automobile Association predicting that the petrol price is set to increase by up to seven cents a litre, it’s unlikely that they would be able to shell out even more money to travel to the City Centre to be able to experience it’s after hour offerings.
Public transport may be the more affordable option than driving one’s own car, but there are downsides such as safety, reliability and lack of infrastructure in certain areas – all of which make middle income earners reluctant to use public transport at night.
With middle income earners not able to afford homes and enjoy the after hours offerings of the CBD, the City itself loses out on the potential of growing its after hours economy, with possible developments of new businesses and job opportunities.
Photography TravelGround
