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For the vast majority of Capetonians, property prices remain too steep to dip a toe in the water.

When you see parking spots being sold for a million bucks, you know things are well past getting silly.

That rapid price increase has seen a marked slowing down in the past while, though, and some areas along the Atlantic Seaboard were the first to be affected.

Now, according to a report on Monyweb, “deflation in house prices in the Mother City…has spilled over to other regions near Table Mountain”.

Using data from the FNB’s latest Cape Town Sub-Regional House Price index, in the first quarter of 2019, price growth also turned negative in the City Bowl, Southern Suburbs, and Eastern Suburbs (areas like Salt River and Woodstock).

On average, prices in [the Atlantic Seaboard] declined by 5.1% year on year in the first quarter, the worst performance to date.

The plunge from the multi-year high growth rate of 25.5% in the first quarter of 2016 has been rapid. Factor in inflation (>4%) and the real decline in these suburbs is approaching double figures.

South Africa’s biggest property portal, Property24, shows that the number of properties on the market (as listed on the site) in Camps Bay, for example, spiked to 477 in April, from levels of just over 400 earlier this year. The picture in Sea Point is similar, with a jump from 698 listings in January to 838 in April.

FNB economist Siphamandla Mkhwanazi says prices are “softening … across virtually all sub-regions, with the upmarket sub-regions in and around the Cape Peninsula being the hardest hit”.

The City Bowl saw, on average, a 2% reduction in price, with the Eastern Suburbs at 4,2%, and 2,4% in the Southern Suburbs.

As the graph below illustrates, the lofty days of 2015/16/17 are well behind us:

Sorry, Somerset West, Strand and Gordon’s Bay property owners, but the news isn’t much better:

…year-on-year price growth has declined sharply – from 5.3% in the last quarter of 2018 to just 1.7% in Q1, 2019. House prices had been growing at around 10% in this region in 2017 and early 2018.

All in all, these numbers equate to the slowest growth rate since the end of 2009:

Here’s a handy stat for Millennials whose parents are trying to kick them out the house, talking up the fact that they bought their first house for a dime and a nickel at the age of 30 back in the day:

The bank uses the ratio of the average property purchase price in the city to the average household income in the province as a proxy – and says the ratio has been “rising since 2012 and reached 6.6 by 2018, the highest it has ever been in the period for which we have data [since 2000]”.

“This means the average priced house in Cape Town was roughly 6.6 times the average household income in the province,” says the bank. “Furthermore, the fact that the trend is upwards means affordability had not really improved by the end of 2018, despite slowing growth in prices since Q2 2016.”

You can be excused for not owning your own house, snowflake.

For the full breakdown of those latest property price trends, head to Moneyweb.

[source:moneyweb]