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Change in demographics on Atlantic Seaboard

Cape Town - Buyers of residential property on Cape Town's Atlantic Seaboard are getting younger and given that these buyers are likely to trade up in the next few years, this bodes well for the future of the market here, said Seeff’s managing director for the areas, Ian Slot.

A detailed analysis of the buyer and seller demographics on the Atlantic Seaboard over the last twelve years, shows a clear shift in the buyer demographics from being overwhelmingly in the 35-plus age group pre-2008 to the 18-35 age group that now makes up about a quarter of all buying here.

Market activity on the Atlantic Seaboard has improved steadily year-on-year from the post-recession hangover lows in 2009.

It is driven by a combination of factors, including an increase in buying by the under 35-age group, said Slot.

Sales volumes here dipped to just 992 sales to the value of about R4.3bn in 2008, down by 45% from the 1 795 sales transactions worth almost R8.4bn in the preceding year.

By last year, this had almost doubled since 2008 to 1 962 sales transactions.

While this recovery has been aided by more buying in the upper price band of between R5m to R10m and a resurgence of demand above the R20m price band, there was a definite boost by younger buyers, he said.

This generational transformation is driven largely by a desire for the lifestyle, but has also been aided by semigration into the area, especially younger buyers from Gauteng.

FNBs semigration statistics also show that the Western Cape remains amongst the best performers when it comes to net migration levels, driven primarily by an aspiration for the Cape Town lifestyle, said Slot.

In Sea Point, for example, where buyers were predominantly older in previous years, about 104 sales over the last year were to the under 35-age group, up by 20% from the 87 sales in 2012, continued Slot.

Even in Camps Bay, he is seeing younger buyers entering with about 12 sales to the value of almost R58m last year to younger buyers, compared to just 6 sales in 2012.

"Looking ahead, the changing demographics bodes well for the future of the property market here and is set to drive the next property cycle," said Slot.

"Rather than older buyers selling off their bigger homes and downscaling for retirement reasons, we are likely to see this younger buyer demographic trade up in the area as they will look to acquire bigger homes to meet their changing lifestyle needs."
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