Thu. Oct 17th, 2019

Cape Town property: Why there’s now an “all-time high” of empty apartments

Cape Town propertyThere are more empty apartments in the city than ever before, according to new data. But what has got the Cape Town property market so spooked?

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The Cape Town property market is one of the most lauded and maligned in the country. Despite being home to some magnificent houses, prices for more modest living arrangements are routinely lambasted for being extortionately high. But it seems like some buyers have had enough.

Desperate times for the Cape Town property market

Samuel Seeff is the chairperson of Seeff Properties. He told Radio 702 that the Mother City is experiencing something of a blip when it comes to selling-on property this year. He told the broadcaster the uncertainties over the 2019 Election and “killer transactional costs” are putting people off:

“The property market is driven by the access and cost of money, the interest rate… and sentiment. We can’t get this election behind us quickly enough – When that’s done, we’ll get back to business as usual. We see no offers in the middle to upper-end. The most activity is in the lower price bands.”

“In the Cape, there’s been development in CBD and seaboard. They won’t be going up any time soon, prices need to take a breather. I’d like to see the government do something about transactional costs, too – they are having a negative impact on the market, as people don’t want to pay an additional 20 – 25% on their assets.”

Samuel Seeff

“More empty apartments now than ever before”

However, it was also reported that the Cape Town property market is experiencing something of an “all-time high” – but there’s no cause for celebration here: In total, 7% of all rental apartments in the city are currently empty, which is much higher than the 1% – 3% this figure usually hovers around.

In fact, if we include all apartments in the city combined – rental or otherwise – that number jumps to 8.1%. Despite Seeff’s promise that things will be “back to normal” after next week’s elections, there are still plenty of factors spooking the buyer’s market:

Land expropriation and the failing crop of SOEs have threatened to destabilise an already-volatile economy, and the property mogul has conceded these variables also impact the process of buying and selling homes.

Cape Town property in a slump

In fact, 2018 was not a kind year for the Cape, either. A report from Pam Golding (shared by Business Tech) revealed an alarming set of data that shows how the hot-streak enjoyed by the market came to an end.

Property in the region is being outshone by new developments and opportunities on the other side of the country. Both Gauteng and KZN are “driving” the market, and Cape Town is falling behind. The inflation of house prices in the south-west also remains above the national average.

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