Property prices in Cape Town’s city centre have escalated to such an extent that it has become unaffordable for most middle-class residents
With the average asking price for a CBD studio apartment a cool R2,6 million and a two-bedroom apartment selling for R5,3 million, it’s not hard to understand why Knight Frank’s Global Wealth Report ranked the Mother City as the third most expensive city as far as property prices are concerned.
Knight Frank’s data echoes a report released earlier this year by the City of Cape Town Central City Improvement District, which reveals that the average asking price for an apartment within the 57 residential complex blocks in the CBD is around R2,233 million.
“Cape Town is facing an urban housing affordability crisis. The housing prices in Cape Town are crazy,” Jared Rossouw, co-director of activist organisation Ndifuna Ukwazi, was quoted saying in an IOL report.
“They are increasing by as much as 16% in Cape Town and by 22% on the Atlantic Seaboard. Middle-class people cannot afford to stay in the city or in areas such as Woodstock and Salt River.
Sue Alison, an estate agent with Lew Geffen Sotheby’s International Realty, says high traffic congestion volumes in Cape Town, and particularly the City Bowl, is helping to drive up property prices in the CBD and surrounds, as the demand from affluent residents grows as they bid to reduce travel time to work.
“With Cape Town’s increasingly congested road network, there is no doubt that the value of property in the City Bowl will keep rising,” Alison says.
More than R12 billion has been pumped into property development projects in the CBD and just last year, 228 apartments were sold in the city centre – up from 163 sold the previous year.
Research from property company Lightstone reveals that house prices in the Mother City rose by 13% in the last quarter of last year, well ahead of the 4% property price growth recorded in Joburg, Pretoria and Durban.
From a rental perspective, if you wanted to rent a swanky two-bedroom apartment in the CBD, you could expect to pay at least R22 000 per month.
Source: Destiny Man