Is Cape Town Property over valued? - Overall conclusions
While each of the individual methods provide a different perspective in establishing whether the Cape Town property market is overpriced, by considering them together a more balanced perspective can be gained. The different trends of the property market which were established through each analysis are illustrated in the table below and split according to areas as the valuation differed depending on location. Each area is then evaluated in respect of the findings from each analysis method and a main trend for the area is established. The overall score for each area is then combined in order to draw an overall finding for Cape Town’s property market in general. The overall trend is cross-checked by the trends per analysis approach.
When comparing such different methods of analysis, it becomes difficult to contrast each method’s findings without a certain measure of personal interpretation. Therefore it should be highlighted that the pricing categorisation is influenced by the authors’ subjectivity.
When comparing such different methods of analysis, it becomes difficult to contrast each method’s findings without a certain measure of personal interpretation. Therefore it should be highlighted that the pricing categorisation is influenced by the authors’ subjectivity.
The overall conclusion that can be drawn from above is that Cape Town’s property prices are indeed correctly valued with a slight tendency to being over-valued. Although many potential purchasers may emotionally feel that their income is insufficient and that ‘Cape Town is just too expensive’, the various approaches have shown that this is not the case, provided they're willing to expand the range of suburbs they're willing to buy in.
For those planning to buy or sell, one of the more relevant findings (especially for buyers) is the current average difference between list and sale prices of approximately 11.3%. In addition, there is a general trend for summer-time prices to be higher than those in winter. And for those thinking about buying or selling in the immediate future, there has been a 20% upswing in prices over the last 4 months, with a corresponding drop in sales volumes of 20% - indicating that house prices are presently considered overpriced by the market.