Authored by the expert who managed and guided the team behind the South Africa Property Pack
Yes, the analysis of Cape Town's property market is included in our pack
What is happening in Cape Town’s real estate market? Are prices climbing or stabilizing? Is the city still a magnet for international buyers? How are local policies shaping the property landscape in 2025?
These are the questions we hear daily from industry experts, potential homeowners, and investors, from the bustling city center to the scenic suburbs. You might be curious about these trends too.
We know this because we maintain close ties with local experts and individuals like you, exploring the Cape Town real estate scene every day. That’s why we crafted this article: to deliver clear insights, thoughtful analysis, and a comprehensive view of market trends and dynamics.
Our aim is straightforward: to make sure you feel informed and confident about the market without needing to search elsewhere. If you think we missed something or could improve, we’d love to hear your feedback. Feel free to reach out with your thoughts, and we’ll strive to enhance this content for you.
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1) Suburban property prices will rise moderately as families relocate
Families are flocking to Cape Town's suburbs like Constantia and Durbanville for larger living spaces and a family-friendly environment.
In 2023, Lightstone's Migration figures showed that 6,406 new households moved to the Western Cape, driving up demand for suburban homes. This influx is largely due to families seeking more room and better living conditions.
The City of Cape Town is investing in infrastructure, including public transport and road networks, which will make suburban areas more accessible and appealing. This means families can enjoy suburban life without sacrificing urban conveniences.
Real estate reports suggest that suburban property prices will rise due to high demand and limited supply. Popular schools in these areas are turning away thousands of kids, highlighting the demand for education and family-friendly amenities.
With these factors in play, suburban properties in Cape Town are set to see a moderate price increase as more families relocate. The combination of larger homes, better infrastructure, and quality schools makes these areas highly desirable.
As families continue to prioritize space and quality of life, the trend of moving to Cape Town's suburbs is expected to grow, further boosting the real estate market.
Sources: Press Portal, Engineering News, Cape Town Price Forecasts
2) Coastal rental yields will stabilize with tourism returning to pre-pandemic levels
Tourism in Cape Town is booming again, with visitor numbers soaring past pre-pandemic figures.
In 2023, Cape Town International Airport saw 1.4 million international passengers between January and June, a remarkable 104% jump from 2019. This surge in tourism has naturally led to a higher demand for short-term rentals, especially along the coast.
December 2023 alone recorded 518,190 arrivals, a 19% increase from the previous year. Notably, domestic visitors rose by 20%, further boosting the need for rental properties in these popular areas.
Real estate in Cape Town is also on the upswing. Rental yields have slightly increased, averaging 5.2% in 2025, thanks to rising rental prices and stable property values. This trend points to a healthy rental market, offering promising returns for property investors.
For instance, a one-bedroom apartment in Cape Town’s Southern Suburbs, valued at R1.4m and rented for R8,000, provides a 6.8% return on investment. This highlights the potential for stable rental income in the area.
As tourism continues to thrive, coastal rental yields are expected to stabilize, aligning with the return of tourism to pre-pandemic levels.
Sources: Western Cape Government, Zawya, Zawya
We made this infographic to show you how property prices in South Africa compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
3) Foreign buyers will prioritize properties with strong internet connectivity
Cape Town is now a top choice for remote workers and digital nomads.
In 2024, the city was recognized as one of the best places for online work, showing its growing appeal. The demand for high-speed internet is crucial, especially for those who depend on digital connectivity. Property experts note that landlords must provide fast and reliable internet to attract tenants, making it a key feature in new properties.
Foreign buyers, especially digital nomads, are keen on cities with strong digital infrastructure. Cape Town offers internet speeds between 30 Mbps and 100 Mbps, making it a prime choice for those needing stable connections for work. This emphasis on connectivity is a major selling point in the real estate market.
In Cape Town, the need for plug-and-play infrastructure is evident, as more properties are being designed with this in mind. The city’s internet capabilities are a significant draw for international buyers who prioritize seamless digital access in their homes.
Real estate market analyses consistently highlight internet connectivity as a crucial factor for property sales. This trend is particularly noticeable among foreign buyers who are increasingly focusing on properties with strong internet connectivity.
As Cape Town continues to attract digital nomads, the city’s commitment to enhancing its digital infrastructure remains a key factor in its real estate appeal. The focus on connectivity is not just a trend but a necessity for those looking to work remotely from this vibrant city.
Sources: Invest Cape Town, Property24, Heavnn University
4) New zoning laws will unlock areas for residential development
In 2023 and 2024, Cape Town revamped its zoning laws, unlocking new areas for residential development.
These changes, part of the Municipal Planning By-law (MPBL) amendments, aim to streamline development and promote sustainable growth. By renaming single residential zoning to 'Residential Zoning (R1)' and introducing new primary uses, developers now find it easier to build in previously restricted areas.
One standout change is the introduction of Incentive Overlay Zones (IOZs) in areas like Athlone, Maitland, and Bellville. These zones offer additional development rights, making them more attractive for investment. The surge in rezoning applications and approvals in these zones shows developers are eager to seize these new opportunities.
Moreover, Cape Town's efforts to simplify building procedures and clarify development rules have likely led to a rise in building permits. This increased flexibility in zoning regulations has made it easier for property owners to develop their land, boosting property values in these newly rezoned districts.
For those considering buying property, these changes mean more options and potentially better returns. The city's proactive approach is not just about growth; it's about creating a more livable and sustainable urban environment. Investors are taking note, and the buzz around these developments is palpable.
With these zoning changes, Cape Town is setting the stage for a dynamic real estate market, where both developers and buyers can benefit. New residential areas are emerging, offering fresh opportunities for those looking to invest in the city's future.
Sources: Property Review, Property24, Solar Quarter
5) Stricter environmental regulations will raise property development costs
Stricter environmental regulations are reshaping the landscape of property development.
One major change is the need to comply with new building codes that emphasize sustainability. For example, the Environment Act 2021 requires all new developments to achieve a biodiversity net gain (BNG) of at least 10%, which must be maintained for 30 years. This rule kicked in for town and country planning in November 2023 and will extend to major infrastructure projects by 2025.
Another factor driving up costs is the push for eco-friendly construction materials. In places like Cape Town, the use of green materials such as precast concrete and sandbags is on the rise. These materials are not only better for the environment but also cost-effective over time. The City Deep Green project in Johannesburg is a prime example, where precast concrete was used to quickly build sustainable structures, cutting both costs and carbon emissions.
There's also a growing demand for green certifications like Green Star SA, which adds to the expenses. In South Africa, the average green cost premium is about 5.0% of the total project cost, with even higher premiums in areas like the Western Cape. This trend is adding another layer of financial consideration for developers.
These changes are not just about meeting regulations; they reflect a broader shift towards sustainable development. Developers are increasingly looking at the long-term benefits of eco-friendly practices, even if it means higher upfront costs. The focus is on creating buildings that are not only compliant but also future-proof.
As these regulations take hold, the property market is adapting. Buyers and investors are becoming more aware of the importance of sustainability, influencing their decisions. This shift is likely to continue as environmental concerns remain at the forefront of global discussions.
Sources: Burges Salmon, ESI Africa, University of Pretoria
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6) Cape Town's property prices will stabilize following a period of rapid growth
Cape Town's property market is set to stabilize after a period of rapid growth.
In recent years, the city has seen property prices soar, but now, year-on-year growth rates are slowing down. For example, by 2025, prices are expected to rise by just 3% to 7%, which is a dip from last year's 5% increase. This trend suggests a cooling off, making it a potentially good time for buyers to enter the market.
Another factor contributing to this stabilization is the growing inventory of unsold properties. While trendy neighborhoods like Woodstock and Observatory are still experiencing price hikes, other areas are seeing slower growth. This increase in available properties gives buyers more options and can help keep prices in check.
Rising interest rates are also impacting the market. They make it tougher for buyers, especially first-timers and those eyeing second homes, to secure financing. This financial pressure is likely to slow down the buying frenzy, contributing to a more balanced market.
Economic challenges are shifting buyer sentiment as well. With inflation and living costs on the rise, people are becoming more cautious about their purchasing decisions. This cautious approach is expected to further contribute to the stabilization of property prices.
Government initiatives are also playing a role. Policies like infrastructure improvements and the Energy Resilience Programme are indirectly helping to cool the market. These efforts aim to create a more sustainable environment, which in turn supports a stable property market.
Sources: Property24, Cape Town Price Forecasts, Pam Golding
7) Inner-city rental yields will rise slightly as young professionals drive demand
Cape Town's inner city is buzzing with young professionals, making it a hot spot for rental properties.
Thanks to a thriving job market, employment among young professionals in the Western Cape is on the rise. This influx of talent is drawn to the vibrant urban lifestyle that Cape Town offers, with its bustling cafes, trendy shops, and lively nightlife. It's no wonder that more young people are choosing to live in the city, fueling the demand for rentals.
Even with 7,188 apartments available in the CBD, the supply can't keep up with the growing demand. This scarcity is pushing rental prices higher, making it a lucrative time for property investors. The city's ongoing development of new amenities and infrastructure only adds to its appeal, attracting even more young professionals.
As the city continues to evolve, rental yields are expected to see a slight increase. The demand from young professionals is a key driver, as they seek out the convenience and excitement of city living. This trend is a golden opportunity for those looking to invest in Cape Town's property market.
With the urban workforce bouncing back to pre-pandemic levels, the city's rental market is poised for growth. Young professionals are not just looking for a place to live; they want a lifestyle that matches their dynamic careers. Cape Town's inner city offers just that, making it a magnet for this demographic.
Sources: CBN, Western Cape Government, City of Cape Town
8) Demand for rental properties near universities will rise with more international students arriving
International students are flocking to Cape Town, making it a hot spot for education.
At the University of Cape Town, nearly 5,000 international students are part of the vibrant campus life, making up 18% of the student body. This influx is not just a number; it's a sign that Cape Town is becoming a preferred study destination.
With more students arriving, there's a growing demand for student accommodation. However, South Africa faces a challenge: there's a shortage of high-quality, affordable student housing. This gap in the market means many international students are on the hunt for off-campus living spaces.
Off-campus housing is appealing to international students because it offers more affordable and diverse options. The limited on-campus housing pushes students to explore the rental market in Cape Town, which is thriving as a result.
As institutions like UCT continue to attract students from around the globe, the student rental market is expected to grow. This trend is a golden opportunity for property investors looking to tap into a booming sector.
For those considering buying property in Cape Town, understanding this dynamic can be crucial. The influx of international students is reshaping the rental landscape, making it a promising area for investment.
Sources: University of Cape Town, World Bank Report
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of South Africa. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
9) Smart home technology will be a major selling feature for new properties
Smart home technology is quickly becoming a must-have feature in new properties.
In South Africa, the adoption of smart home technology has been on the rise, with the market valued at USD 2.32 billion in 2023. This figure is expected to soar to USD 8.63 billion by 2030, reflecting a 20.7% annual growth rate. This surge shows a strong interest in smart homes, driven by the convenience and security they offer.
Homebuyers are increasingly looking for energy-efficient and automated solutions. In fact, 75% of potential buyers are willing to pay more for a smart home, and 70% are actively seeking properties with these features. Renters are also on board, with 82% wanting at least one smart device in their homes, underscoring the growing importance of smart technology in real estate.
Real estate listings now often highlight smart home features, emphasizing their convenience and energy efficiency. Real estate agents report that buyer interest in smart home features is high, making them crucial in today's market. Developers are partnering with tech companies to integrate smart solutions into new properties, enhancing their appeal.
Global trends are influencing local markets like Cape Town, where urbanization is on the rise. As more people move to urban areas, the demand for connected home technologies is expected to increase. This trend is mirrored in the global market, which is also experiencing significant growth.
Sources: NextMSC, Exploding Topics, Integrated Homes
10) Buyers will prioritize home offices, impacting property design
Remote work is reshaping how we live and work, especially in 2023 and 2024.
In Cape Town, there's a noticeable trend: more people want homes with dedicated office spaces. The office vacancy rate in the Cape Town CBD dropped from 13.3% in 2022 to 10.2% in 2023, hinting that folks are opting for home setups. This shift is not just about convenience; it's about creating a comfortable work environment at home.
People are increasingly looking for homes that cater to their work-from-home needs. Consumer surveys reveal a strong preference for home offices, and many South African companies are adopting hybrid work models. This change is driving demand for modern, ergonomic home office furniture, making it a hot market.
Real estate listings in Cape Town are catching on, often highlighting home office features. Buyers are prioritizing these aspects when searching for new homes. Real estate agents confirm that dedicated office spaces are a top request from potential buyers.
As more people work from home, the design of properties is evolving to meet these new demands. Home offices are becoming a must-have, influencing how homes are built and marketed. This trend is not just a passing phase; it's a significant shift in how we think about living spaces.
Sources: Bizcommunity, Moonstone, Employer of Record SA, All Office
11) Woodstock’s property interest will grow with its expanding arts and culture scene
Woodstock is quickly becoming a sought-after area for property buyers, thanks to its thriving arts and culture scene.
In recent years, property prices in Woodstock have surged, making it a hot spot for both investors and residents. This trend stands out even more when you compare it to other neighborhoods in Cape Town, showing a clear rise in interest. The area is buzzing with art galleries, like the Stevenson Gallery, which puts local artists on the global map. Events such as the International Public Art Festival add to Woodstock's reputation, attracting both locals and tourists.
Woodstock's creative vibe is further fueled by the presence of innovative businesses and startups. Places like the Bandwidth Barn nurture these creative enterprises, adding to the area's dynamic atmosphere. This entrepreneurial spirit not only supports the arts but also draws in more residents and businesses, making the neighborhood even more appealing.
Media coverage has played a significant role in highlighting Woodstock as a cultural hotspot. The growing arts scene has caught the attention of potential residents and investors, thanks to increased visibility in the media. Social media trends showcasing Woodstock's vibrant arts scene have also contributed to its rising popularity.
With its unique blend of art, culture, and innovation, Woodstock is becoming a magnet for those looking to invest in property. The neighborhood's transformation into a cultural hub is evident, and it's drawing interest from all corners. As more people discover what Woodstock has to offer, the demand for property in the area is likely to continue its upward trajectory.
Sources: Moneyweb, Woodstock Improvement District, Africa Travel, Uvu Africa
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12) Demand for properties with outdoor spaces will grow as lifestyle preferences change
People are increasingly valuing outdoor spaces in their homes.
Since 2020, there's been a 50% surge in demand for outdoor areas, reflecting a shift towards more harmonious living environments. This trend is expected to continue into 2025, with a growing focus on sustainability and adaptability in outdoor living spaces.
In bustling urban areas like Cape Town City Bowl, properties with gardens, balconies, or terraces have become hot commodities. These features are no longer just nice-to-haves; they're actually driving up property values. Real estate listings in Cape Town are increasingly highlighting these outdoor features as key selling points, showing just how much demand is growing.
Consumer surveys back this up, showing a strong preference for outdoor living areas. For example, a survey by the Environmental Policy Research Unit at the University of Cape Town found that middle-income communities crave public green spaces. This suggests a wider preference for outdoor living across different socio-economic groups.
As lifestyle preferences shift, there's a clear trend towards increased demand for properties with outdoor spaces. This is not just a passing fad; it's a significant change in how people want to live.
Expect to see more real estate listings emphasizing outdoor features as key selling points, especially in urban areas where space is at a premium. This shift is not just about aesthetics; it's about creating a more sustainable and adaptable living environment.
Sources: Cape Town Price Forecasts, EPRU Survey, BD Magazine
13) Virtual reality tours will become a standard tool in property marketing
By 2025, virtual reality tours have become a standard practice in property marketing.
Back in 2023 and 2024, over half of adults had already experienced a virtual tour, and a notable 67% of home buyers preferred listings with this feature. This shift was all about wanting a more immersive way to check out properties.
Virtual tours give buyers a detailed, interactive look at homes, something photos and videos just can't match. In 2024, listings with virtual tours got 87% more views, and people spent more time on them. This shows how effective virtual tours are at grabbing and keeping buyer interest.
Thanks to advancements in VR technology, it's now more accessible and affordable, which has boosted its use in real estate. By mixing AI with VR, companies offer even more realistic and informative tours, making the experience better for potential buyers.
These tech improvements, along with positive feedback from clients who've used VR tours, have cemented virtual reality's role in property marketing. It's not just a trend; it's becoming the norm.
14) Khayelitsha will see increased property development with infrastructure improvements
Khayelitsha is undergoing a transformation with major infrastructure upgrades.
The MyCiTi bus service is expanding, part of Cape Town's plan to improve public transport. This project, known as Phase 2A, is backed by a R7 billion investment from the national government. New bus stops in Khayelitsha are making the area more accessible, which is a big deal for residents.
As property prices soar in central Cape Town, buyers are eyeing more affordable spots like Khayelitsha. With better transport links, thanks to the MyCiTi upgrades, commuting is now easier, making Khayelitsha a hot spot for potential property buyers.
Khayelitsha's population has been on the rise, jumping from about 391,749 in 2011 to nearly 500,000 in 2018. This growth means more demand for housing and infrastructure, which is catching the eye of property developers.
The property market here is buzzing. The Transaction Support Centre has been involved in over 100 property transaction cases, showing a vibrant community ready for future developments.
With these changes, Khayelitsha is set to become a key area for property development as infrastructure continues to improve.
Sources: MyCiTi Expansion Plans, Cape Town Etc, Wikipedia, Housing Finance Africa
We did some research and made this infographic to help you quickly compare rental yields of the major cities in South Africa versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
15) New schooling facilities will boost demand in the Southern Suburbs as families are drawn to the area
The Southern Suburbs are becoming a hotspot for families due to new educational facilities.
In 2023 and 2024, the Western Cape Education Department opened several new schools, including Silikamva High in Hout Bay, which started the academic year in a brand-new building. This move is a response to the growing demand for quality education, and it's already showing a clear rise in enrollment.
Since 2010, the government has been busy enhancing educational infrastructure, with 47 new and replacement schools planned and completed. This ongoing construction is particularly significant in the Southern Suburbs, which are home to rapidly growing communities.
Real estate experts often note that family-oriented neighborhoods tend to expand when high-quality schools are nearby. This is exactly what's happening in the Southern Suburbs, where families are eager to live close to good schools, leading to increased demand for family-sized homes.
As a result, property sales and inquiries in the area are likely to rise, driven by families looking for homes near these new educational institutions. The Southern Suburbs are becoming a prime location for those prioritizing education, making it a smart choice for potential buyers.
Sources: Western Cape Education Department, Educating Cape 2040
16) Observatory will emerge as a student accommodation hotspot with university expansions
Observatory is set to become a prime spot for student housing thanks to some key developments.
The University of Cape Town (UCT) is experiencing a boom in student numbers, with 28,000 students enrolled in 2023. Yet, by 2024, only 8,400 students found spots in UCT residences, leaving a big gap in housing. This shortage is a golden opportunity for areas like Observatory, which is conveniently close to UCT.
Student housing demand in Cape Town is through the roof, with universities hitting full occupancy as of August 2024. This trend shows a strong market for student accommodation, and Observatory is in a sweet spot to take advantage of this, given its proximity to major educational hubs.
Adding to the mix, a new private university, Stadio, is opening in nearby Durbanville by 2026. This campus will welcome 4,000 to 5,000 contact-learning students, further boosting the need for student housing in the region. Observatory, with its strategic location, is likely to attract many of these students.
Observatory's appeal isn't just about location; it's about timing too. With the ongoing expansion of educational institutions, the area is becoming increasingly attractive for property investors looking to tap into the student market.
As universities expand and new ones emerge, Observatory is positioned to become a bustling student hub, offering both convenience and opportunity for those looking to invest in student accommodation.
Sources: UCT Handbook, Bizcommunity, GlobeSt
17) Water conservation efforts will influence property development and landscaping decisions
In Cape Town, water conservation is reshaping property development and landscaping.
Back in 2023 and 2024, the city introduced rising water tariffs to push residents towards smarter water use. This means the more water you use, the more you pay, making everyone rethink their water habits at home and in their gardens.
During droughts, Cape Town enforced strict water usage restrictions, prompting residents to adopt water-saving habits like reusing bathwater for gardens. These habits have stuck, influencing new property developments to focus on water-saving technologies and efficient water use.
The city also promotes drought-resistant landscaping. By removing non-native, water-hungry plants, Cape Town saves billions of liters of water annually. This not only conserves water but also nudges property developers towards sustainable landscaping that aligns with conservation efforts.
Water conservation is now a part of everyday life, and developers are incorporating water-saving technologies into new properties. This includes everything from efficient irrigation systems to rainwater harvesting setups.
These initiatives are not just about saving water; they are about creating a sustainable future. Property buyers are increasingly looking for homes with eco-friendly features, making water conservation a key selling point.
Sources: Brookings, Aquarista, Smart Water Magazine, Nature.org
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.