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Does crime really affect home buying and renting trends?

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If suburbs with lower crime rates are more attractive to property buyers and tenants, and can attract higher sale and rental prices, why is Western Cape property some of the most expensive in the country?

According to property data analytics company, Lightstone – which used crime data from the SAPS – and grouped it into statistics on a more granular level, Western Cape residents have experienced more residential crime than their counterparts in every other province for the past four years.


These are SA’s top-10 crime hotspots


Classifying malicious damage to residential property and home burglary as residential crime, and burglary, shoplifting and robbery at non-residential premises as non-residential crime, the rates have been standardised per thousand households to show crime relative to the size of the population.

Western Cape top of its classCape Town bay

“The Western Cape has the highest average residential crime rate per thousand households. While the rate has dropped slightly in the past two years, the crime rate is still much higher than that of the next most crime-ridden province, the Northern Cape,” according to a Lightstone report. “Gauteng and the Free State showed similar rates per thousand households in 2016.

May graph 1 provincial crime number

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“Limpopo has the lowest provincial crime rate, although it has seen progressive increases over the past four years. This trend does not necessarily mean that the province is bucking the trend, however. It could rather be the result of an increase in access to police stations in the province’s developing rural areas. More police stations mean easier access for residents to report crime, which would show up in the numbers as more incidents.”


Profiling house robbers


Lightstone also classifies suburbs into different categories, based on where they are located. By far the largest proportion of suburbs (44%) is located within a metropolitan area.

May graph 1 provincial crime number

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May graph 2 suburb classification

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“Given that these metros are, by definition, major economic hubs, we can reasonably assume that the people who live in these suburbs will be wealthier, on the whole, than those who live in the suburbs of small towns or rural areas,” says Lightstone. “And so it’s safe to say that they own more assets, and assets of greater value – a combination that’s enormously appealing to the criminally inclined.”

Crime hotspots are in metropolitan suburbs which have the highest residential crime rates, followed by the suburban areas of large and small towns, and then inner-city residential areas.

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Click to enlarge

“Security is a major factor for people who are looking to buy property in major metropolitan suburbs,” says the report. “Complexes and estates are perceived to be more secure, which is why gated living is so popular – and hence why these properties are so much more expensive.”

Despite higher residential crime in the Cape, house prices continue to outperform. In Q1 2017, the City of Cape Town’s estimated average house price growth rate remained in double-digit territory to the tune of 14.1% year-on-year, but slower than the 14.5% revised rate for the final quarter of 2016. This is according to FNB’s household sector strategist, John Loos, who constructed the City of Cape Town Metro House Price Index using deeds office data.

“While still very strong, this year-on-year price growth rate represents the fourth consecutive quarter of slowing from a 10-year high of 15.8% revised rate recorded in Q1 2016,” he says, noting that on a sub-region over a five-year cumulative basis, house prices have grown 141.2% on the Atlantic Seaboard. “This is followed by the City Bowl with 106.7%, City Near Eastern Suburbs with 95.7%, Southern Suburbs with 80.5%, and Southern Peninsula with 77.2%.”

david.steynberg@gmail.com

David A Steynberg, managing editor and director of HomeTimes, has more than 10 years of experience as both a journalist and editor, having headed up Business Day’s HomeFront supplement, SAPOA’s range of four printed titles, digimags Asset in Africa and the South African Planning Institute’s official title, Planning Africa, as well as B2B titles, Building Africa and Water, Sewage & Effluent magazines. He began his career at Farmer’s Weekly magazine before moving on to People Magazine where he was awarded two Excellence Awards for Best Real Life feature as well as Writer of the Year runner-up. He is also a past fellow of the International Women’s Media Foundation.

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