Cape Town? Or Johannesburg?

In the great “which city is better” debate, let’s take a quick look at which of the two fares best as an investment when it comes to buying property.

As Business Tech explains, both are “major growth hubs” – but while the Mother City has “traditionally been a more attractive option for investors, not everyone is drawn to coastal living”.

Also, we don’t need more people living down here right now.

Developments in Johannesburg are becoming increasingly more attractive as they are “cheaper than those in Cape Town, but offer better value for money since they attract good rental returns and growth on investment”:

Peet Strauss of Pam Golding Properties said there are various factors that make property purchases in either city a good investment.

“The trend in the Johannesburg market is more towards an income model while the Cape Town market has bigger capital growth potential. Properties in Johannesburg are relatively cheap, compared to Africa and the rest of the world, even South African standards,” said Strauss.

Not only is Johannesburg affordable, he said, but it consistently shows good rental returns – a trend that has been continuing for a while.

“One can buy for a bit cheaper than anywhere else, and rent for a bit higher. A savvy purchaser would buy now especially if they’re not planning on selling again and long-term income is their basis for investment,” he added.

However, if you are wanting to sell your house in five years for a solid return on your investment, choosing a decent Cape Town property is the way to go.

Interestingly, there has been a spike in South Africans looking for “urban mixed-use developments” with added security and convenience of amenities:

This surge across our major cities is called new urbanism, where everything you need is within easy reach in walkable neighbourhoods where you live, work, socialize [sic], shop, and more, without facing daily commutes and endless traffic.

“The ‘new urban’ concept, where lifestyle meets real estate, really resonated with the Johannesburg market, which is why Melrose Arch has been so successful. It’s a walkable precinct, with all daily needs within walking distances – offices, restaurants, shops, hotels, banks, medical services, health clubs, entertainment, and so much more,” said Nicholas Stopforth, MD of Amdec Property Development.

At the end of the day, in whichever city you choose, there are some necessary guidelines to follow:

[I]t’s crucial to stick to traditional areas where there are new developments over a stretch of time and not just a “flicker” of activity. In Johannesburg, Strauss said there are pockets of value in areas like Rosebank, Sandton, Melrose Arch and Fourways.

I have a feeling those Cape Town micro apartments – here and here – are going to be a hit.

[source:businesstech]