Published in News24
South Africa’s property market had a good year in 2016, according to a global property report published this week. In the report, two South African cities ranked higher in terms of property value growth than wealthier global counterparts Milan, Tokyo and Moscow.
At position 92 out of 150 cities is Cape Town, which saw property values grow by 3.9% last year, topping major cities that include Paris and New York.
Johannesburg came in at number 109 with a steady 2.2% growth last year, which experts say is good, but still beneath the global 6.6% average, according to the 2017 Knight Frank Global Residential Cities Index. The index looks at the property markets of 150 cities to determine the average increase in property values over a 12-month period.
“The lifestyle that Cape Town offers is exceptional and hard to beat for the sort of money you pay to live here,” says Denise Dogon, chief executive officer (CEO) of Dogon Group Properties.
“With the way it has developed in terms of restaurants and infrastructure, and all the awards it has won, the report doesn’t surprise me. It’s also one of the safer cities as crime is generally confined to certain areas.”
Durban’s property rankings dropped into the bottom 10 worldwide with a negative growth of -5.1%, which Pam Golding CEO Andrew Golding says is an unfair generalisation. “I think that Durban, like many of the cities on that list, has many pockets that are great performers, so to throw a blanket over a whole city isn’t really a great indicator. But, in fairness, the Western Cape has been outperforming everywhere else, and in 2016, Joburg and Durban have certainly been lagging behind,” he says.
“The reason is that Cape Town sees an above-normal migration of people owing to the perception of the lifestyle it offers. Another important factor is that it benefits the most from foreigners who invest there.”
But all this might change after the recent economic downgrades. “Our experience of what’s happening in the market was [before the] downgrade. We haven’t been able to assess the market yet, because March is a good month for the residential property industry and April is a slower month because of the holidays. By the end of May, we’ll have a much better picture,” Golding says.