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Seaside village homes and lifestyle estates: The shift in property prices
By Koketso Mamabolo The latest property numbers present a fascinating insight into how demand is being shaped by more than just affordability. In May this year, StatsSA released its Residential Property Price Index, the yardstick which measures how the price of residential properties changes at the national, provincial and metropolitan levels, revealing how prices continue to rise. Annual national inflation was sitting at 6.1% in May, up from 5.8% in April. The biggest contributor was the Western Cape with 9.4%. At the metro level Cape Town contributed the most at 8.1%. But this doesn’t mean buyers have lost their appetite. The numbers for properties sold to first-time buyers increased by 4.4% year-on-year, evidence that there is still fresh demand despite higher headline prices. The same is true over the long term. According to BetterBond’s Property Insights, the average home price has increased by 10.7% since 2019. The average home now costs R1.6-million. And yet, since the fourth quarter of 2023 the number of home loan applications has gone up by 26%.A lower prime lending rate and five successive cuts to the repo rate have driven the 14.6% year-on-year increase in applications. Economists expect inflation to remain at the lower end of the Reserve Bank’s target making it likely that the growth will continue. With lower borrowing costs the narrative has shifted toward a buyer’s market, at least for the moment. Growth rates for all buyers are lower than the Consumer Price Index and right now residential property is a sound investment and the Western Cape is leading the way. The Western Cape accounts for 38 percent of the value of residential building plans passed in the country nationally, and the province has recorded double digit figure year-on-year growth. “The Western Cape has shown greater property appreciation and higher rental yields than the rest of the country due to semi-migration,” says Marc Rodrigues of the Delta Property Group.“The province experienced a surge in demand as remote work increased and people moved to towns that are well run.” While the beaches and mountain views remain powerful draw cards, people are also looking for service delivery, schools, retail centres, gyms etc. In short, they’re looking for a lifestyle. Whether that be a home in the city, or a holiday home on the coast of a world-renowned tourist destination. Scarborough is an interesting example which highlights a significant trend that is somewhat unique to the Western Cape. The seaside village recorded almost 70 percent of purchases in 2024 by foreign buyers, according to Lightstone Property. The same is true across the province, and these properties are well above the R1.6-million national average. More than 40 percent of the residential property purchases above R10-million were made by foreign buyers, and the top 22 suburbs in the country favoured by foreign buyers are all in the Western Cape. Couple this with the rise of the digital nomads and semi-migration and it’s clear why developers are not holding back. Cape Town’s CBD is reaping the benefits. Current estimates by the Cape Central Improvement District value investment at just over R9-billion across 27 developments at various stages. Forty four percent of those projects are residential, and seven are mixed-use, highlighting the demand for urban living, not just little paradises on the Atlantic seaboard. The country’s largest metropolitan area, Johannesburg, has seen success in gated communities with the perks they bring. Property developer Paul Tedder has found a similar demand for lifestyle-focused properties in the south coast of KwaZulu-Natal, as semi-migration from the province’s north coast picks up due to various factors. “The value proposition of gated communities is undeniable. They offer peace of mind and sense of community that many buyers now prioritise,” explains Tedder. When buyers are chasing scenery, rental yields or a lifestyle pivot to remote-friendly towns, they look to the coast. For those looking to settle in the city or its outskirts, Cape Town’s CBD offers many options, with more to come, and the suburbs of Johannesburg remain a compelling option for the schools and proximity to the heartbeat of the country’s economy. Buyers have more options and Marc Rodrigues advises sellers to price homes correctly to avoid losing out. Sources: BetterBond Property Brief | StatsSA RPPI | Lightstone Property | The State of Cape Town Central City Report
When less is more – why more South Africans are choosing to downsize their homes
By Bradd Bendall Affordability, life stage and semigration are some of the reasons why buyers are opting to downsize their properties. Downsizing has traditionally been associated with retirees leaving larger family homes, but its appeal is extending to a broader range of buyers – including budget-conscious families, young professionals and remote workers. Many of these buyers want homes that may be smaller in size, though not necessarily lower in value. Empty-nesters and retirees Leading the downsizers’ pack are older homeowners nearing or in retirement. With children grown and gone, many are selling their large homes to purchase low-maintenance, lock-up-and-go properties. This trend is supported by data from the Q4 2024 FNB Estate Agents Survey, which found that 21% of sales were due to a change in life stage. Similarly, Lightstone reports that many retirees who bought non-retirement homes later in life opted for sectional title properties or lock-up-and-go homes in lifestyle estates. BetterBond’s application data for the 12 months ending in May shows that over-60s are spending on average R2.2-million on a home – an increase of almost 3% from the previous year. This also highlights the fact that a smaller property does not always mean it is lower in value. Security, convenience and access to amenities often come at a premium price. Budget-wise Beyond retirees, financial pressures are encouraging many South Africans to rethink their housing needs. Rising living costs and economic uncertainty have pushed middle-income earners to sell their larger properties to buy homes that are more affordable. These buyers can then manage bond repayments, reduce monthly expenses and better adapt to their changing financial circumstances. Younger buyers Millennials and younger buyers downsize more for convenience and lifestyle than financial necessity. They are drawn to smaller homes that offer greater convenience and access to recreational facilities. Sectional title properties, apartments and townhouses offer flexibility and require less maintenance. Digital nomads and remote workers The rise of remote work and digital nomadism is also reshaping house preferences. Remote workers prefer compact, high-end apartments or co-living homes with fast internet and flexible leases. Whether they’re based in the city or moving to quieter coastal towns, digital nomads prioritise simplicity, connectivity and flexible living. As a property investor, buying an apartment close to tech hubs such as Cape Town, Stellenbosch or Sandton in Gauteng will yield excellent returns given the strong demand for rental accommodation. Smaller can be better There are considerable benefits to downsizing. In some cases, a smaller home may mean reduced monthly bond repayments, lower utility bills and easier maintenance. However, downsizing does not always mean moving to a home that is lower in value. The move could be to a smaller home in a better location, or to a modern home with high-tech security or smart home automation. A lock-up-and-go property appeals as it allows for greater mobility, remote work flexibility or the option to generate an income through short-term rentals like Airbnb. Downsizing also speaks to the emerging trend of ‘quiet luxury’. Wealth is implied, rather than overstated. A carefully curated home that is functional and sustainable exudes sophistication and luxury. Moving into a smaller home within a gated community or secure estate brings additional peace of mind, while inner-city apartments and mixed-use developments offer convenient proximity to shops, workplaces and recreational spaces. Research also points to the emotional and mental benefits of downsizing and decluttering. For many homeowners, swapping a larger property for one with less onerous upkeep brings unexpected relief. As the to-do list of home repairs and chores becomes considerably shorter, there’s also more time to explore new hobbies or travel. Compact carbon footprint Beyond the convenience and possible cost-saving, downsizing allows for a more sustainable lifestyle.. The ‘tiny home movement’, for instance, is gaining momentum in South Africa, with some choosing to live in homes no larger than 37 square metres. The emphasis with these homes is on functionality and simplicity, not size. These homes, made of eco-friendly materials, often incorporate energy-efficient systems such as composting, rainwater harvesting and renewable energy options. No longer only a financial decision, downsizing is becoming a strategic, lifestyle-enhancing choice for buyers of all ages. Increasingly, a broader cross-section of buyers is choosing to live smaller while living better. Bradd Bendall is BetterBond’s National Head of Sales