Tourism, good for economic growth and a boost for property
Category Newsletter: Article
The summer is always a fabulous time in the Mother City. When the sun is out, the restaurants, diners and beaches are packed as locals and visiting tourists are out en masse. Tourism is not just good for business and the economy, it is also an excellent catalyst for growth in the local property market.
Tourism brings visitors from across the country and world to the city which in turn creates a buoyant demand for holiday rentals. Overseas visitors, especially those from the UK and Northern Europe absolutely love South Africa and sometimes spend extended periods in the city.
Short term rental income is often notably higher and can provide more attractive returns for property owners and investors. Many visiting tourists are also keen property buyers and investors and Cape Town is renowned as a popular destination for second homes, attracting buyers from across the country and globe.
According to a news report earlier in the year, tourism contributes R15 billion to the local economy. A record high of 10 million visitors passed through Cape Town International Airport in 2016 and it is now the third busiest airport on the continent. Additional flights have been added to bring even more tourists to the city.
Cape Town Tourism has done an excellent job to market the city, identifying and positioning top features such as Table Mountain as major international attractions. These days, everyone wants a photograph with the mountain, being one of the New Natural Wonders of the world, but there are many other attractions that bring people to the city. The Waterfront, history and heritage, winelands and other coastal hot spots, all attract a fair share of visitors.
Tourism is one of the fastest growth sectors of the economy and for the Cape in particular. In some parts of the property market, especially coastal areas such as the Atlantic Seaboard, but now also in areas such as Blouberg, False Bay and Hout Bay, anything up to 20% of activity is as a result of tourism.
Foreign buyers also often improve their properties which further add to the upgrade of areas and the market. The rising demand provides a further boost for new developments as more and more people want to buy and invest in the coastal areas.
While buyers from the UK, Europe and USA have long been keen investors in South African property, growing the tourism markets to include more African visitors and people from the Middle and Far Eastern destinations such as the UAE and India has further added to the demand for property.
Also exciting for the city, is the extension of the Waterfront’s new Silo Precinct that will further enhance this already popular attraction for the city. The Cruise Terminal is another welcome addition for tourism growth and a cruise ship in the harbour, is always a welcome sight.
Importantly though, is that it is not just foreign visitors, but predominantly South Africans from other provinces who are investing in the city.
Globally, tourism has been a tremendous catalyst for property growth including in many highly successful international property markets such as London, Dubai and even Sydney in Australia.
The Coastal Property Group has launched a short-term letting division, Coastal Air to cater for the growing short-term holiday and rental market on Cape Town’s Atlantic Seaboard. Visit www.coastalpropertygroup.co.za for more information.
Author: Coastal Property Group