Cape Town tipped to bottom out

Cape Town could be the best place to invest in property in South Africa, a real estate expert there has argued.

Writing for South African property site Real Estate Web, chief executive of Durr Estates Julian Reynolds noted that the city has seen the largest price falls of any metropolitan area in the country, with 91 per cent of homes sold below asking amounts in the second quarter.

However, he added: "With prices expected to bottom out over the next few months, the potential upside for the Cape property market exceeds that of other provinces."

Mr Reynolds said the city will be aided by its tourist popularity and by the particular focus that will be placed on it as a host city in next year's World Cup, which may help stimulate more property investment.

Last month, the Knight Frank Global House Price Index indicated that during the second quarter of 2009 prices in South Africa dropped by 1.4 per cent.

This was an improvement on the 1.8 per cent dip in the opening three months of the year, suggesting the downturn in the property sector has been losing momentum.

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