Stock Compression Energises Cape Town’s Southern Suburbs Sectional Title Sector

Cape Town’s southern suburbs' sectional title market is entering a new phase.

With existing apartment stock down 30% since February and more than 1 000 new units entering the market via 14 active developments, the region is balancing constrained resale supply with a surge in new-build options, according to Brent Townes, who heads the Sectional Title team at Lew Geffen Sotheby’s International Realty in Cape Town’s southern suburbs,

The July 2025 FNB House Price Index held steady at 3.7% year-on-year, now outpacing inflation and setting a post-pandemic milestone.

Resale Stock Compression: A Seller’s Window

Townes says the number of listings of existing apartment stock on the market has dropped from 930 in February to 647 in July – a 30% contraction.

“This tightening of supply is supporting price resilience, especially in well-located sectional title units near transport corridors, schools, and retail hubs.

“Sellers prepared for market with all necessary documentation such as compliance overlays and levy histories, are seeing faster traction and cleaner offers.

“What this means, in a nutshell, is that sectional title owners in Claremont, Kenilworth, Rondebosch and Wynberg who are thinking of selling, should act decisively. The window for premium pricing is open.”

Development Surge Expands Choices

Townes says developers are acting on the current demand, with 14 projects underway across the southern suburbs that will add 1 019 new apartments across various price bands that range from a base of around R1.199 million (vat included) to R16m, with a cluster starting around R1.199m to R1.575m up to between R3.595m and R5.795m.

“They’re going to have no trouble finding buyers, and these units will only temporarily satisfy demand.

“The good news is that more sectional title developments are in the pipeline, signalling a shift toward developer-led supply in nodes like Harfield Village, Kenilworth, Plumstead and Ottery.

“While this surge offers buyers more choice, it also introduces price tension – especially where new builds compete with older stock lacking compliance clarity or upgraded amenities.

“That said, despite myriad new builds I don’t foresee a drop in demand for older apartments, because buyers are motivated by a variety of factors. They should validate new-build pricing against resale benchmarks, factoring in levies, service reliability and long-term yield potential.”

Buyer Sentiment: First-Time Buyers Rebound

Townes says one of the foremost indicators of the current market surge is first-time buyer (FTB) demand rising to 47.9% of bond applications in July – the highest in nearly a year

Cape Town’s Southern Suburbs are among the top-performing regions for FTB activity.

“Back-to-office momentum is also reshaping buyer priorities. Compact, well-located units are in high demand.

“Subdued inflation and the recent 25bps rate cut are expected to further support FTB activity, especially in mid-tier schemes from R1.35m to R2.5m.”

Townes says developers would be wise to tailor offerings to FTBs; thinking along the lines of modular layouts, transport access, and levy transparency.

“The southern suburbs buyer pool is now distinctly segmented. Roughly one-third of all buyers are investors, actively seeking yield-driven opportunities in well-located sectional title schemes with strong rental demand and low vacancy risk.

“Another third are first-time buyers drawn by affordability, transport access and proximity to schools and retail.

“The remaining third are lifestyle traders, either upsizing for family needs or downsizing into lock-up-and-go units.

“This mix is driving a layered market dynamic where pricing, compliance and amenity overlays must be tailored to specific buyer segments.

Macro Signals

Townes says the Absa/BER PMI rose to 50.8 in July, crossing the expansion threshold for the first time in 9 months. The purchasing price index also rose to 59.3 but remains historically low, suggesting inflationary pressures are contained.

“The final push that investor sentiment needs now is positive progress on the US trade tariff front. If the government can negotiate a reduction in the 30% tariff imposition it will see Cape Town’s property market surge ahead on a sustained wave of renewed investor confidence and support the city’s export-linked real estate segments.”