Property

Foreigners are flocking to this small town in South Africa

Kirsten Minnaar • 20 October 2025

Hout Bay is emerging as Cape Town’s next major investment hotspot, bolstered by multimillion-rand infrastructure projects and high-end developments.

With international demand accelerating and Cape Town making record infrastructure investments, a rare opportunity is emerging within one of South Africa’s most dynamic luxury property markets.

Cape Town’s property prices increased by 8.5% year-on-year in 2025, significantly above the national average of 5.2%. This increase is attributed to increased demand driven by domestic migration and foreign investment.

The luxury property scene is booming, with international buyers spending over R1 billion on Cape Town real estate in just five months of 2025.

Cape Town’s economy outperforms the national average, with lower unemployment, a thriving tech sector, and a robust tourism industry.

While Cape Town’s Atlantic Seaboard has long dominated South Africa’s luxury real estate conversation, Hout Bay is emerging as the region’s most compelling new investment frontier.

Hout Bay is attracting significant international buyer interest, with property transactions already exceeding R600 million in 2025.

In 2025 alone, there have been 37 foreign transactions, with sales ranging from R5 million to R25 million, chasing last year’s staggering R1.3 billion mark.

Hout Bay’s property market has shown consistent growth, with average selling prices increasing by approximately 6.7% annually.

This significantly outpaces the national average, but higher-end properties and new developments can see up to 9.5% growth yearly.

Hout Bay combines substantial infrastructure investment, strong price appreciation, and a distinct lifestyle offering that attracts local and international buyers seeking value with premium amenities.

Plans are underway to redevelop Hout Bay Harbour into a destination akin to Cape Town’s V&A Waterfront, promising a blend of retail, dining, and leisure experiences.

There is also a R50 million tidal pool project at Hout Bay beach, which is set to enhance community access to the beach, benefiting both residents and visitors.

New luxury developments come to Hout Bay

Revo Property explained that Hout Bay’s impressive capital growth has been reflected in two projects they’ve represented within the past 18 months.

One of its new developments, Elora, is situated at 43 Victoria Avenue, a mere 5-minute walk from Hout Bay’s beachfront.

Revo Property CEO and founder Emanuel Germanis said the development “embraces the rhythm of Hout Bay’s coast, offering the rare balance of village calm and coastal energy”.

Elora is a unique development in a market defined by limited availability and high demand. It comprises 19 apartments, including studio, one-, and two-bedroom homes.

Each is designed with thoughtful layouts and seamless indoor–outdoor flow, with large windows and private balconies framing ocean views.

It is just a short stroll away from cafés, boutique shops, and transport routes, connecting residents to the heart of the village.

The City of Cape Town has outlined plans for significant infrastructure upgrades in Hout Bay, including improved road networks and public amenities, ensuring the area’s continued development and appeal.

In addition, the City of Cape Town has committed R6 billion to upgrading wastewater treatment facilities in the area, supporting sustainable growth and infrastructure development.

“With landmark projects like La’Mare and The Beach House defining Hout Bay’s high-end property scene, Elora marks the next phase of growth,” Germanis said.

He explained that it will offer a distinctive combination of architectural refinement, prime positioning, and strong investment potential.

As demand for premium, well-positioned properties continues to rise, he said Elora presents an opportunity to secure lasting value in a market on the ascent.

With its strong fundamentals – location, design integrity, and limited supply – the development is expected to be a sound investment.

Short-term rentals in Hout Bay are also thriving. According to the AirROI 2025 report on Hout Bay Airbnb data, the average monthly revenue for Airbnb hosts in Hout Bay is around $20,308.

Occupancy rates are at 44%, and the average daily rate is $197, showing the area’s appeal to short-term visitors.

“Properties in the top 10% of the market achieve occupancy rates exceeding 81%, underscoring the demand for quality accommodations,” Germanis explained.