ELLIS MNYANDU, Cape Town | Thursday 6.40pm
THE Western Cape property market outperformed the rest of the country, with Cape Town property prices rising by 4,6% in real terms on an annual basis last year, while in the rest of the country they stood steady.
According to Rode & Associates — a Cape-based property valuers group — Cape Town’s residential property prices Johannesburg and Durban house markets had put in a dismal performance in 1999, with real growth rates declining by 13,6% and 17,6% respectively last year.
Pretoria prices fell by 6,2% and Port Elizabeth by 8,0%.
”The Western Cape economy will in the long run . . . keep on outperforming the rest of SA. In its wake house prices will also do better,” Erwin Rode, a property economist from Rode & Associates said in a presentation at the conference. The Building Industries Federation of SA has projected overall growth of four percent for SA’s building industry this year, rising five percent in 2001, after it contracted five percent last year.
Speaking on the sidelines of the conference, a senior industry analyst said that Cape Town is expected to be at the forefront of an expected recovery in the country’s building sector this year.
Johan Snyman, a building economist from Medium-term Forecasting Associates, said Cape Town continues to be a magnet for those seeking business and residential property investments compared to crime-riddled Johannesburg. ”Regionally speaking Cape Town is popular, Gauteng less so,” Snyman said. ”The reasons for Cape Town’s popularity are fairly well known. It’s an attractive city from an investor’s point of view and it has a fairly pleasant climate and relatively low crime levels,” he added.
He said the highest growth area in which Cape Town was expected to lead the building sector’s rebound was in the residential property market. That was despite higher building costs in the coastal regions such as the Western Cape in which Cape Town lies. — Reuters