- Experts predict the buyer’s market will continue in 2023, despite interest rate hikes and loadshedding.
- Cape Town is experiencing significant semigration, and developers are responding to the rising demand for properties.
- More properties are being built, and the increasing stock keeps prices down.
You may be concerned about how inflation, loadshedding, and interest rate hikes are affecting the property market, but if you’re a buyer in Cape Town, it’s good news. The Cape Town property market has been a buyer’s market for some time, and data analytics company Lightstone forecasts that it will remain so for 2023.
We’re still in a buyer’s market for several reasons:
Interest rates are still relatively low
There may have been a succession of hikes in recent times as the South African Reserve Bank looks to combat inflation, but interest rates remain relatively low; below the average of 13%-15.5%. Furthermore, experts believe that the upward trend will come to a halt soon.
Semigration is increasing the demand
South Africans have been adapting to the post-lockdown work-from-home lifestyle by migrating to more remote, scenic areas. Coastal areas are the primary target, and the Western Cape is experiencing significant semigration, with a 20% increase to 120k in 2023.
New Cape Town developments are arising in response to this growing demand. With the property stock increasing, buyers have more choices and thus sellers have to lower their prices.
Of course, semigration might gradually lead to the opposite effect in a few years, which is why it’s essential for buyers to take advantage of the situation now.
Increasing competition between banks
Bank approval rates are above 80% as healthy competition between banks leads them to compete for buyers.
One of the most significant barriers for first-time homebuyers is the deposit, but there is the option for 100% home loan which removes the need for a deposit. And in the current climate, buyers are more likely to get one approved.
As well as providing more scenic locations for stay-at-home work, Cape Town is doing a more effective job of combatting loadshedding than the rest of the country. Municipalities are competing to see who can get off the grid first, and the decreasing reliance on Eskom enables the Western Cape to maintain lower stages of loadshedding than the national level.
Know what you can afford
If you’re looking to take advantage of the buyer’s market, it helps to know what you can afford. Getting prequalified with ooba Home Loans will allow us to assess your financial situation and determine your chances of home loan approval, and what price range you should be aiming for.
Armed with this information, you can house hunt confidently, knowing that as long as you stay within the estimated price range, your chances of home loan approval are strong.
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