Cape Town property prices push first-time buyers towards joint ownership and smaller investments

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Is the dream of home ownership in Cape Town slipping away?

702 and CapeTalk’s Africa Melane asked Rowan Alexander, Director of Alexander Swart Property Group, for his thoughts on the matter.

Melane noted that Stats SA records Cape Town as having the highest annual property price increases among South African metros. “Prices rose by 12% in June of 2026. That’s compared to 4.9% in Johannesburg,” Melane said.

Alexander said these latest stats are a reflection of a long-term trend.

“It’s not something that’s happened overnight; it’s something that’s gradually been happening over time… the Western Cape and Cape Town, it’s no secret that they’ve been pulling away from the rest of the country in terms of pricing.

“What we are, however, seeing is the fact that it is becoming harder as a sort of middle market, you know, for people to become first-time homeowners,” Alexander said.

However, he added that South Africans are resilient. “We find creative ways to get around these things.

“So yes, while it’s harder for a first-time owner to purchase the home they’re living in, we are seeing actions like joint purchases. Maybe purchasing something smaller, things like that.”

Which of those alternative solutions are they finding to be most popular?

“I think one of the big things that we see is that parents are purchasing along with their children. I mean that’s something that’s always been happening but something a lot more prevalent now where either your children are maybe purchasing the property that their parents are staying in… where the parents would maybe stay on once they are retired. So, creating a sort of dual living property.

“Or where kids might still be staying at home, but the children and their parents start purchasing an investment property very early on. So, it might be something small, it might be a bachelor apartment, but that there’s some form of joint purchase just to get their foot in the market,” Alexander said.

He added that very often now they are also seeing young people actually combining purchasing power to buy investment property. “Rather than purchasing a primary residence because it might be so hard for them to get into the primary residence market. But pooled income and investment is maybe a lot easier to achieve.”

He said in Cape Town they’re seeing micro units being popular. “Where sometimes it’s up to 35, 30, 38 square meters and you’re paying R2.5 million for it. And it’s in a repurposed building that looks very nice and is used for short-term lets and stays.”

He added that many are renting while having their own tenants.

“So, I think that’s been a mind shift that a lot of people have made and that we’re becoming more accustomed to is to understand that you don’t need to own the property that you are living in. As long as you own some form of property, you’re still seeing the upside of what’s happening in the Western Cape, especially.”

What do you think needs to happen to improve property values in the City of Joburg?

“So that’s been the long-term challenge, and I think it’s directly related to service delivery and good governance… And I think during periods of hope, areas like Gauteng have experienced positive growth too, but in a lot more niche areas…

“I think entering into this new sort of political space that we are, where we’re looking at coalition governments going forward, I think with more hope will come more confidence and more investment.”

Alexander added that it will be good for the Cape Town market too, if the national market as a whole starts doing better.

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