Brief
Cape Town property prices surge as affordability slips, warns economist
At a LexisNexis conference, an economist warned that rising prices and stagnant wages are making home ownership unaffordable for many Cape Town residents.
By Felo News Desk · Published
Cape Town’s property market is experiencing a sharp price increase that is outpacing local income growth, according to University of Cape Town economist Alan Davids, who spoke at the 2026 LexisNexis Future of Conveyancing Conference in Century City on 19 October.
What happened
Davids highlighted that Cape Town has become a “superstar city,” attracting both domestic and international buyers while struggling to supply enough housing. He cited data showing a widening gap between Cape Town and other South African metros, with property values continuing to climb sharply even as many cities elsewhere have seen stagnation or decline over the past decade.
What the reports add
The conference presentation noted that more than half of global cities are now classified as severely or impossibly unaffordable, a trend that mirrors Cape Town’s situation. Davids warned that the share of income required to service a mortgage on a median‑priced home is approaching 50 percent for the average resident, indicating a severe affordability crunch.
What was said
“What makes this wave of rising house prices different is that we’re seeing housing affordability worsen as well,” Davids told the audience, as reported by bizcommunity.com.
“Housing is no longer a sectoral issue. It is likely to be the number one political issue in our economy,” he added, referencing similar debates in cities like Paris and New York.
How it came about
Davids linked the surge to a combination of high demand, constrained supply, and broader municipal service challenges that push more people to seek homes in Cape Town. He described housing as simultaneously a consumption good, an asset, and a debt‑financed product, meaning price rises create winners among existing owners but losers among renters and first‑time buyers.
Key facts
- Cape Town property values have continued to rise sharply while many other cities have stagnated or declined. (bizcommunity.com)
- The share of income needed for a median‑priced home is nearing 50 percent for the average resident. (bizcommunity.com)
- More than half of global cities are now classified as severely or impossibly unaffordable. (bizcommunity.com)
Sources
- [1] bizcommunity.com — originally reported as “Cape Town’s housing boom: How long before locals are priced out?”
