Property choices and trends influenced by inflation

PUBLISHED 30 JUN 2019   

High inflation and a sluggish economy are two of the challenges facing South Africa - and the Cape Town property market is feeling the pinch.

Fuel price hikes, the ever-rising cost of electricity, and imported items costing more due to a weak Rand are all contributing to a higher than average inflation rate.

As consumers adapt to costlier living, they are making economical choices when it comes to the homes they choose to buy. Let’s take a look at this trend in a little more detail.

Inflation is here to stay - at least for a while

The inflation rate may have settled around 4.4% this year, but it’s still a bit early for South African consumers to start celebrating.

The cost of fuel and electricity are still on the rise, with oil imports costing more due to the weaker Rand and Eskom’s ongoing woes pushing up the price of power.

  • Since the Eskom crisis began in 2008, the cost of electricity has risen by a huge 274.45% - almost tripling in a decade.
  • The Rand has lost almost half its value against major currencies over the same period, causing all imported goods to cost more.

Fuel and electricity are essential to all aspects of the economy, and consumers are having to tighten their belts to pay their expenses in the wake of rising prices.

That means less disposable income to cover bond and rent payments - and it’s already having an impact on the property market.

Sectional Title to the rescue?

As budgets become tighter and home maintenance costs soar, house buyers are opting for apartments and townhouses instead of the pricier traditional houses for sale on the market.

Sectional Title developments account for a bigger share of total approved building plans in 2019, and the trend shows no signs of reversing.

Cape Town Realty has an especially good selection of sectional title properties, from beachfront flats to townhouses and duplexes in secure developments with great views and access to schools and other facilities.

These properties tend to be better priced for first-time buyers, be they young professionals or families. They are also more affordable to maintain and often feature on-site shopping, dining and other facilities.

If you’d like to find a home that suits your budget, lifestyle and financial goals, contact the
Cape Realty team today. 

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