The first quarter of 2024 has shown a notable slowdown in home buying activity in South Africa due to high interest rates, as reported by ooba Home Loans. Despite the broader market cooldown, the Western Cape’s residential property market stands out with a significant price growth of 9.4%, outpacing inflation. This growth is largely fuelled by affluent foreign buyers and investors, rather than local purchasers.
This trend in the Western Cape is described as an “incredible difference” by Barbara Friedman from CapeTalk, highlighting the region as a unique case where property values have surged despite stagnant economic growth in other parts of the country. Meanwhile, the report contrasts this with a decrease in property prices around Johannesburg’s West Rand area, where prices dropped by -8.6%.
The rising property prices in the Western Cape, while beneficial for the local economy, pose challenges for residents grappling with economic hardships, as higher property values can drive up the cost of goods and services. Rhys Dyer, CEO of ooba, anticipates potential relief with predicted interest rate cuts by the end of 2024, suggesting a forthcoming opportunity for prospective homebuyers to enter the market.
