Pressures increase on Cape Town’s property market

1. Pressures increase on caPe Town’s Pressures increase on caPe Town’s property market property market One of the notable aspects of Cape Town’s property market is the diversity of its neighborhoods, each with its distinct character and property types. One of the primary factors influencing Cape Town’s property market is demand. Certain areas in the city, such as the Atlantic Seaboard and the Southern Suburbs, are known for their high demand and premium prices. Properties in these areas often boast stunning views, desirable amenities, and proximity to popular attractions, making them sought-after by local and international buyers. However, the demand in these areas also drives up prices, making them less affordable for some buyers. The prime rate increase adds further economic

2. pressure on individuals and businesses, highlighting the challenges faced by locals who are thinking about buying, or relocating to one of these areas. The recent increase in South Africa’s Prime Lending Rate, which went up to 11.25% in March 2023 from 10.75% in February 2023, has added further economic pressure on individuals and businesses. This ongoing increase in both the repo rate and the prime lending rate has many businesses and consumers in distress, as they are concerned about the impact on their debt repayments, especially in the property market where the cost of their bond repayments is a major expense. Cape Town’s property market is currently the biggest sector that is affected by the recent increase in its prime lending rate. Zahir Vallie, the owner of the Z- PROP, had recently ensured citizens of Cape Town that the increase in the prime lending rate may be challenging, but the properties at Z-PROP will be worth the expenditure. While Z-PROP specializes in rentals rather than sales, their accommodation options provide some relief, showing the property market some light at the end of this long and dark tunnel of an increasing prime rate.