We take a look at the property market in South Africa with a particular focus on the property market in the Western Cape and in particular Cape Town. The growth in rentals paid in the Western Cape is far outstripping that of other provinces in South Africa, and with punters, investors and individuals all looking to get in on the act, the question is whether this is creating a property bubble?
So thinking of buying a new car in 2019? Think again.
The implication of a property bubble in the Western Cape is far reaching, if there is a bubble. But we are concerned that it certainly looks like there is a bubble developing. And with property agents, investors, individuals all looking to get in on the Cape Town property market, to charge excessive rents, which so far clients have been willing to pay, one has to wonder if the demand is pushing up prices to unsustainable levels? And whether the rent asked for properties in the City of Cape Town will eventually be to much for renters, who will start going elsewhere and this could lead to this inflated market crashing down as those who bought overpriced properties in the City (looking to make money of rental income) start to feel the pinch of rent not covering their bonds anymore, which will force some to sell and drive down prices as everyone heads for the exit in the City of Cape Town property market.
This is all hypothetical right now of course, but sings are there.
“South African Market Insight”
