Even Cape Town's property market is starting to feel economic squeeze

Home buyers and property investors may want to check out Elsies River and Delft as deeds data research shows these Cape Town areas are showing good growth.

This comes as slowing growth has taken place in seven of the 12 regions of the city in the second quarter of 2017‚ the latest FNB Property Barometer report shows.

John Loos‚ the bank's household and property sector strategist‚ commented: "In a relative boom period‚ one can often see the higher-priced sub-regions leading the cycle‚ but as their affordability becomes a mounting challenge‚ the search for relative affordability can turn a portion of housing demand in the direction of more affordable sub-regions.

". . . It is possible that this is what we have begun to see in Cape Town’s major 'affordable' regions‚ that is‚ the Cape Flats and the Elsies River-Blue Downs-Macassar regions‚" he said.

The Cape Flats year-on-year house price growth has accelerated for five consecutive quarters from 10.4% in the 1st quarter of 2016 to 12.5% by the 2nd quarter of 2017‚ the property barometer shows.

The Elsies River-Blue Downs-Macassar area had reached 13.7% average price growth by the second quarter of 2017‚ having accelerated for seven consecutive quarters from 5.4% in the third quarter of 2015.

Loos noted: "The evidence of mounting Cape Town affordability challenges continues to come from our FNB Estate Agent Survey which‚ for the first two quarters of 2017‚ showed a very low estimate of first time buyer levels in the City of Cape Town".

While the National Average estimate is that first time home buyers amounted to 21% of total home buyers in the first half of 2017‚ Cape Town’s estimate was a far lower 6.64% - having deteriorated steadily from an average of 18.4% in 2015.

"We believe that this extremely low estimate is reflective of a significant affordability deterioration in recent years in the City of Cape Town Metro.

"This affordability challenge could conceivably contribute to some strengthening in more affordable sub-regions with the metro‚" said Loos.

Overall‚ though‚ stacking up all of the regions next to each other‚ the Atlantic Seaboard region remained the one with the strongest house price growth in the second quarter of 2017 at 29.9% year-on-year.

This was followed by 21% in the City Bowl.

Calling them "red hot"‚ Loos said: "These two regions were the clear top performers in the second quarter".

He added‚ however‚ that whereas previously the other three of the "top five" were in or around the Cape Peninsula‚ the pattern has become less clear.

"The Southern Suburbs region did take third spot by a very small margin with 14‚7% year-on-year price growth. But coming into the top performer mix was the Western Seaboard (Blouberg-Milnerton-Melkbos) region in fourth spot with 14% price growth."

Commenting on the Western Seaboard‚ he said it was "a relatively affordable region for middle to higher income households looking for the next best thing from a lifestyle and commuter location".

The far more affordable region of Elsies River-Delft-Blue Downs was in fifth spot with 13.7% year-on-year average price growth.

The Near Eastern Suburbs including Salt River‚ Woodstock and Pinelands came in at 13.5%. The report noted the area was showing "a noticeable price growth slowing‚ from a high of 18.4% year-on-year in the third quarter of 2016".

The Durbanville-Kraaifontein-Brackenfell region has slowed to growth of 6.8% (from 14% in early-2016)‚ while the Bellville-Parow and Surroundings region has slowed to 8.3% growth (from 12.6% in late-2015).

Loos noted: "The Northern regions of the City of Cape Town have generally been more affordable‚ but they have their own challenges in terms of being further removed from the key employment nodes in the Southern Suburbs and City Bowl‚ and with increasing congestion making commuting ever more challenging."

Cape Town maintains its prime status‚ overall.

Said Loos: "Although the City of Cape Town has seen some mild slowing in average house price growth over the past five quarters‚ at 13.8% year-on-year this market remains very strong".

- TimesLIVE