The 2018 general valuation roll recently released by the City of Cape Town reveals that homes in the city are worth 34% more than they were three years ago but real estate experts have their doubts.
The figure, which is based on market data and sales, has been met with concern as agents and property experts do not believe all the valuations are accurate.
While acknowledging that some regions in Cape Town have shown “impressive growth” compared to the 2015 roll, chief executive for Harcourts Africa Richard Gray says, overall, property values have declined in the past 12 to 18 months.
“Indicative of these concerns is that some of our offices are finding municipal valuations are much higher than the actual market value.”
Gray says both internal and external factors have influenced the Cape Town property market, and these include:
- Economic pressures on consumers impacting demand.
- The water crisis.
- Volatile economic market conditions.
These factors play a major part in how buyers and sellers perceive the state of the market and thus have an immediate influence on market value.
“It is always difficult to analyse and summarise an entire property market across a wide region due to the intricacies of the local landscape.
“It has to be understood that the wide variety of properties across the city present different opportunities, therefore, activities vary greatly.
“However, from a holistic perspective, the market has undoubtedly declined since mid-2017, with prices remaining relatively unchanged during this period.”
Furthermore, Gray says it is “imperative” to note that the market will change in the coming months.
“Eskom’s woes need to be rectified urgently as foreign investor confidence is being dramatically reduced due to our national electricity crisis.”