Western Cape outshines in SA’s Property Growth Race

Top Highlights:

• Cape Town leads national house price growth, with 8.5% annual inflation, driven by lifestyle demand and limited stock.
• Small towns like Swellendam, Barrydale, and Still Bay are booming on the back of tourism, semigration, and remote work.
• Affordable property under R1 million still exists in Cape Town’s northern suburbs, ideal for first-time buyers and investors.
  
  
  

Why the Western Cape Is Outperforming the Rest

South Africa’s property market is showing signs of a solid rebound, and nowhere is that more evident than in Cape Town and the broader Western Cape. With Stats SA reporting a national annual house price inflation of 5.2% as of January 2025, Cape Town stands out, recording a robust 8.5% increase — well above Johannesburg’s modest 2.3%.

Industry experts point to a combination of lifestyle appeal, robust infrastructure, investor confidence, and strong demand from both local and international buyers as key drivers.

Cape Town: A Market on the Move

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According to Adrian Goslett, CEO of RE/MAX of Southern Africa, "Cape Town’s sustained growth reflects high buyer demand, particularly in the upper price brackets and coastal lifestyle segments."

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Luxury suburbs like Llandudno and Hout Bay are among the standout performers:

• Llandudno average prices surged 135% since 2019, now sitting at R27 million.
• Hout Bay rose from R3 million to R4.47 million a 49% increase.

The city centre is also booming. According to Chapter Developments’ Guy Gordon, urban renewal projects like Lilly May are drawing young professionals and global investors alike. Located on Buitenkant Street, this new Art Deco-inspired development combines lifestyle and investment appeal with units from R1.749 million and projected net rental yields up to 11.66%.

Cape Town’s City Bowl, in particular, is forecasted to deliver 12- 14% capital growth in 2025, thanks to its global ranking as a top city and its growing reputation as a tech, tourism, and lifestyle hub.

Country Towns and Coastal Gems Thrive

Beyond the Mother City, country towns across the Western Cape are seeing unprecedented growth. According to Jaco Badenhorst of Seeff Country and Karoo, towns like Swellendam, Barrydale, Ladysmith, and Pearly Beach have become magnets for semigrants, retirees, and remote workers.

Lightstone data shows that:

• Over 8,000 transactions worth nearly R9.5 billion were recorded in 2024.
• 90% of deals were below R1.5 million, offering accessibility and value.
• Freehold homes dominate, but lifestyle and retirement estates are gaining popularity.

Infrastructure upgrades, local economic development (e.g., the R4.5 billion Overberg Wind Farm near Swellendam), and a peaceful lifestyle are contributing to demand. Rental markets in towns like Bredasdorp are also heating up, with full occupancies and rising yields.

Coastal towns like Still Bay and Gansbaai are also showing strong momentum:

• Gansbaai’s average price has risen by over R1 million in four years, now sitting at R2.25 million.
• Still Bay’s popularity is driven by retirees, holidaymakers, and its proximity to the Garden Route.

Affordable Opportunities Still Exist in Greater Cape Town

Despite the region’s reputation for premium pricing, Susan McCarthy of Seeff Brackenfell reminds buyers that affordable options still exist - particularly in the northern suburbs.

Areas like Kuils River, Kraaifontein, and Eerste River offer sectional title units between R700,000 and R1.2 million. Developments like Chardonnay Court offer modern, secure two-bedroom units under R1 million with no transfer duty and bond costs included, appealing strongly to first-time buyers and investors.

Lightstone data reveals:

• 37% of recent buyers are under 35 years old.
• Property values in these suburbs have risen by 70% over the past decade.

The Role of Foreign Buyers, Tourism, and Digital Nomads

Cape Town continues to attract strong foreign interest. In 2024 alone, property sales linked to digital nomads reached R4.8 billion. International arrivals, eased by expanded flight routes and visa programs, are fuelling demand for short-term rentals and buy-to-let investments.

Emanuel Germanis, CEO of Revo Property, notes: “The rental market is surging, especially for centrally located developments like Lilly May, close to major attractions like the V&A Waterfront and Table Mountain.”

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This is transforming Cape Town’s urban core into a high-yield, globally competitive investment zone.

The Way Forward: A Region poised for Long-Term Growth

Cape Town and the Western Cape are proving to be South Africa’s standout performers not just in terms of price growth, but also in innovation, lifestyle quality, and investment resilience.

From affordable starter homes to luxury lifestyle properties and booming rural towns, the region offers a broad spectrum of opportunities.

With strong semigration trends, international investor interest, and tourism momentum, the outlook remains bullish — especially as interest rates show signs of easing and GDP growth stabilises.

For buyers and investors, the message is clear: the Western Cape isn’t just outperforming, it’s redefining the future of South African real estate.

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