Buying property in Cape Town for under R1 million

While Cape Town may be renowned for its high property prices, experts say that there are still areas that can be purchased for under R1 million.

According to Payprop, the Western Cape had the highest average rental price in the country, at R11,141, as of the final quarter of 2024.

According to Ooba Home Loans, the province also has the most expensive houses in the country, costing an average of R1.61 million.

The gap between house prices in the Western Cape and the second most expensive province, KwaZulu-Natal, is a whopping R560,000.

However, there are still affordable properties in the city. These offer access to Cape Town’s amenities and growing property market while being reasonably priced.

According to the Seeff Property Group, properties below R1.21 million are also exempt from transfer duty, thus providing considerable savings, especially for first-home buyers.

Susan McCarthy, manager for Seeff Brackenfell, said that the northern suburbs of Cape Town are a great area to look for affordability. These neighbourhoods offer good access to transport networks, schools, and general amenities.

This, combined with the affordability factor, makes it easier for first-time buyers to get onto the property ladder, secure their own homes, and build wealth.

If, at a later stage, they need to move to a larger property, it always leaves the option to retain the current property as an investment.

Given the high demand for rentals, this is a great option. Alternatively, they could sell it at a profit to use as a deposit for their next property purchase.

McCarthy said neighbourhoods such as Kraaifontein and Kuils River are a good choice for good value as you can find sectional title property in the R700,000 to R1.2 million price range.

Affordable options in Cape Town

In Eerste River, for example, the new Chardonnay Court offers two-bedroom units with modern finishes, a solar geyser, a private outdoor braai area, and a parking bay for just R949,900.

Pets are also permitted on approval from the Body Corporate. The complex is secure and within walking distance of two Fives football fields. There are 17 units up for grabs.

There is no transfer duty payable. Additionally, all bond registration and transfer duty costs are included in the price. Levies are low at just R600 per month, which is a considerable benefit for first-time buyers, she added.

It is also a neighbourhood with good amenities and access to major routes, with transportation options such as buses, taxis, and a train station readily available.

There are schools, shopping centres, medical care, places of worship, a police station, sports grounds and other amenities.

The area is popular with first-time buyers. Lightstone data revealed that 37% of recent buyers are under 35, and 44% are between 36 and 49.

Property values increased by around 70% over the last decade, with a significant growth spurt during the high-demand Covid-19 boom period, making these a good investment. She says they are also great for rental investments.

Overall, first-time home buyers make up a considerable portion of total home sales across the country. According to mortgage originator Ooba, there has been a slight uptick in first-time buying.

They accounted for around 46.5% of home loan applications in the first quarter. The survey also shows that favourable mortgage lending conditions support first-time buyers.

Additionally, most banks still offer full bonds to qualifying buyers, depending on the property. Young buyers are not only purchasing for their own use, but there is a growing appetite to invest in property for the rental market.

Ooba, for example, also reported a significant rise in investment property applications from younger buyers, rising from around 3% in 2019 to 9% last year.