2016 from the same period in 2015, to around ZAR 1.27 trillion. An increase of financial pressure on SA households due to the expected fallout following the country’ s downgrade is likely to increase this figure in 2017.
Natalie Muller, Regional Head of Rentals for Jawitz Properties Western Cape, predicts that, as far as rentals go, high risk tenants will become more exposed and landlords might start to see more tenants starting to default on their payments. South Africans are being encouraged to pay off as much high-interest rate debt as possible, and to become more frugal in their spending. This does not equate to buying property or taking on more mortgage-related debt.
What’ s next? The jury is out on the continued growth of the Cape Town property market in the months to come. Will semigration to the WC continue, despite higher rental and property prices in the region? Will more families decide to rent, choosing to delay their first property investment purchase further? And will planned spending on urban renewal and infrastructure development in the City continue or will it need to be put on temporary hold?
Time will surely tell.
INCREASED DEMAND ON INFRASTRUCTURE
A recent Baker Street Properties article highlights that City’ s capacity to roll out infrastructure to support demand in housing is also being outstripped by the rate at which Cape Town is welcoming new residents.
“ Expect more time in your car or transport, increased parking fees and a rising premium on sectional title living close to main commercial nodes such as the CBD, Seapoint, Claremont, Century City and The V & A Waterfront,” the article concludes.
According to Rob Kane, chairperson of the Cape Town Central Improvement District( CCID),“[ t ] he values of private property in the CBD, even of underutilised commercial buildings, are now such that it has become difficult for private developers to construct affordable housing”. Kane points to a public-private partnership that could successfully enable this to occur.
RESOURCES
2016 State of Cities Report, Lew Geffen Sotheby’ s International Realty, Seeff, MoneyWeb,
Business Tech, PayProp, Baker Street Properties, Sygnia Asset Management Company, IOL, News24,
Fin24, Global Property Guide, Jawitz Properties, Chas Everitt International,
www. reimag. co. za MAY 2017 SA Real Estate Investor 15