The Western Cape is SA’s most sought-after place to live

Published September 2024

High interest rates have yet to dampen demand for residential property in the Western Cape. “This province remains the most sought-after region in the country, with the demand for a range of properties being driven by two waves – semigration and reverse migration – as expats return home after spending time abroad,” says Bradd Bendall, BetterBond’s National Head of Sales. 

“Stats SA’s recently released Residential Property Price Index paints a glowing picture of the Western Cape’s success story. House prices in the region have increased by almost 36% over the past five years, notwithstanding the pandemic, geopolitical challenges and rising interest rates.” This is well above the national house price inflation of 23.8%. According to the index, property prices in the Western Cape increased by an average 4.8% each year during the period under review. 

In his State of the Province address delivered last month, Western Cape premier Alan Winde said the province’s population is expected to reach 10 million by 2040. “While this does place additional pressure on local authorities in terms of services and infrastructure, the expansion also points to the appeal of a province that is known for its natural beauty, economic opportunities, educational and medical facilities, good infrastructure, reliable service delivery and effective policing,” says Bendall. 

The Western Cape offers the best of both worlds – coastal destinations such as Hermanus, the West Coast and Garden Route as well as country retreats in small towns such as Greyton, Tulbagh and Stanford. Families are spoilt for choice when it comes to school and tertiary education options throughout the province. “For those favouring a hybrid work approach, it’s possible to enjoy the many benefits of small-town living without having to drive too far to get to an office or urban centre.”

While desired by investors and buyers at the upper end of the market, the Western Cape has plenty to offer buyers across price bands, adds Bendall. Lightstone data reports that 40% of its housing stock is under R750 000, making it an ideal province for first-time buyers. “In the past 12 months, the Western Cape had a 20% share of BetterBond’s home loan market, according to BetterBond’s August Property Brief,” says Bendall. Lightstone reported earlier this year that between 2019 and 2023, the sales of homes between R100 000 and R20 million increased from 23% to 27%. 

This solid performance across a wide price range underscores the Western Cape’s broad appeal with first-time buyers, young professionals, those moving provinces and expats returning to the country with foreign currency to spend on more expensive homes. Buy-to-let investors also benefit from buying in the Western Cape, which registers the highest rental prices in the country, according to PayProp. Rental prices have increased by 55.9% since 2014, underlining this province's massive demand for accommodation. 

Another popular destination on many tourists’ itineraries – Mpumalanga – also surpassed the national average, reports Stats SA, with a 27.7% house price growth in the past five years. “Considered one of the country’s top travel destinations, it is also becoming an investment hotspot with returning expats wanting to live close to the bushveld and a few hours’ drive from Johannesburg,” says Bendall. 

The Eastern Cape and North West both performed well, with house prices increasing by 22.4% in both provinces over the five-year period, reports Stats SA. Gauteng, the country’s economic epicentre, recorded a five-year house price inflation of 16.4%, below that of North West and Free State. The Northern Cape registered the slowest growth with an inflation of just 0.9%. 

“The Western Cape’s consistent house price inflation, which eclipses that seen in other provinces, shows that this region is sought after by buyers irrespective of their price preferences,” concludes Bendall.