The South African property market is showing encouraging signs of recovery, with real estate emerging as the second most popular asset class in the country, according to the 2024 South African Investor and Banking Report and at the epicentre of this emerging trend is the Western Cape.

“This is a significant development, as it reflects growing confidence in the stability and long-term returns offered by property,” says Claude McKirby, Co-Principal for Lew Geffen Sotheby’s International Realty in Cape Town’s Southern Suburbs and False Bay, adding that the growing interest in property investment reflects a broader shift in how South Africans view real estate.

“Property is no longer just a place to live, it’s increasingly seen as a means of securing financial stability and creating generational wealth and this is becoming particularly evident among younger buyers, who are entering the market with a long-term perspective.”

Data from ooba reveals that national demand for investment or buy-to-rent properties reached 13.9% of total applications nationally in Q4 2024, up from 11.8% in Q4 2023 and the Western Cape’s contribution to this trend is undeniable, with the region accounting for a significant portion of investment property transactions.

The province has emerged as a hotspot for investment buyers, with 34% of all bond applications received by ooba in the region in the final quarter of 2024 being for investment properties, which is a notable spike compared to 29% for the same period the previous year.

The Eastern Cape also registered strong growth in investment demand during the final quarter of last year, rising from 14% of all applications in Q3 ’24 to 18% in Q4 ‘24.

“This shift is driven by the dual appeal of property as both a high-return investment and a reliable safeguard against financial losses and further fuelled by strong demand for rental properties in most areas,” notes McKirby

“Another contributing factor is the affordability of sectional title homes, which make up around 60% of investment purchases. These properties are particularly appealing to first-time investors, who often opt to rent out their purchases while continuing to rent their own homes.”

According to Rhys Dyer, CEO of ooba Home Loans, 10% of first-time buyers are now purchasing property for investment purposes which is a stark contrast to the 4% recorded in 2014 and underscores a growing awareness of property as a tool for building generational wealth.

McKirby believes that the Western Cape’s dominance in the investment buyer market is a testament to both the region’s enduring appeal and the growing recognition of property as a reliable asset class.

“For investors, the province represents a unique opportunity to capitalise on a thriving rental market and stable property values and for first-time buyers, it offers a pathway to financial security and generational wealth.

“And in a time of economic uncertainty, the resilience and appeal of property as an asset class provide a beacon of hope for investors and homeowners alike.

“As the South African property market evolves, one thing is clear: the Western Cape is leading the charge, setting the standard for investment potential in the years to come and, as more South Africans embrace real property as a tool for wealth creation, the demand for investment properties is likely to continue its upward trajectory.”