Western Cape property loses its lustre due to severe drought
The Western Cape’s housing market is expected to underperform in 2018 and Gauteng’s may be improving‚ according to FNB’s Property Barometer.
The annual report reveals home-buying patterns in the country‚ indicating migration patterns in various provinces.
"While much interprovincial repeat home-buyer migration is driven by economic opportunity‚ we believe that it has increasingly been due to a greater search for ‘quality of life’ or ‘lifestyle’ by the country’s higher-income people. This includes a significant number of working people who have the financial and increasingly the technological means to work remotely from their place of employment‚ or away from their business or their client base‚ and relocate across the country in search of greater quality of life‚" the report reads.
Retirees are also moving from major metros to coastal or rural areas.
"The Western Cape province has over the past decade or so been benefiting from this search for quality of life‚ having managed to successfully brand itself as a great ‘lifestyle’ province‚ in addition to being one which has been relatively well run at provincial government level‚ as well as at local government level in many districts‚ including most notably the City of Cape Town metro."
However‚ the drought that has been plaguing the Mother City in recent years and the subsequent water crisis means that the region’s popularity dwindled.
Prof Patrick Bond from the University of the Witwatersrand (Wits) said that local officials needed to adapt their policies to include possible natural disasters.
"The ecological cycle is moving more quickly to extreme droughts‚ floods and sea-level rise. This will not necessarily shift migration‚ but it will create micro-catastrophes in markets where urban managers have been slackers on climate change adaptation‚" Bond said.
"Regrettably‚ that includes every city in SA‚ but the storms and water shortages that have battered Johannesburg‚ Cape Town and Durban the last three years should alert every home-buyer to demand from their municipalities some clear evidence that climate change adaptation and also emissions mitigation will finally be taken seriously."
The report indicates that even though the Western Cape retained its top position for 2017‚ it fared significantly poorer than it did in the past.
"We believe that 2018 will see more improvement for Gauteng‚ and weakening in the net inflow into the Western Cape‚ the latter province being hampered by significantly worse home affordability along with a severe drought‚" the report says.
"Gauteng of late experienced a relatively affordable housing market‚ driving very strong recent first-time buying and‚ perhaps‚ beginning to persuade a greater number of aspirant ‘semi-grants’‚ especially to the Western Cape region‚ to stay where they are‚ at least for the time being."
Prof Cyril Mbatha from the University of SA (Unisa) warned that the water crisis in the Western Cape could lead to other catastrophes if not addressed urgently.
"I think the … drought will eventually also affect other aspects of life in the Western Cape‚ including increased crime and social instability.
"The FNB report predicts that the situation will be worse for the property market in the coming year.... This will be the case for a number of years‚ even if the weather patterns improve and other interventions are instituted in favour of increased water supplies in the Western Cape."