By Hilary Alexander, dhk Senior Associate and Head of Communications

Executive Summary‍

Themed ‘Recalibrating the Development Conversation, the 2025 edition of the Western Cape Property Development Forum (WCPDF) conference highlighted the province's rapid growth trajectory and the critical infrastructure and regulatory challenges that must be addressed to sustain development. A sobering notion was the province's significant growth trajectory: a population equivalent to a city the size of Bloemfontein is predicted to move to Cape Town by 2027. This highlights the systemic challenges that need resolution to sustain this development.

Economic growth and employment challenges

Professor of Economics Haroon Bhorat and Director of the Development Policy Research Unit at the University of Cape Town presented sobering statistics about South Africa's economic performance. He highlighted the slow economic growth over the past three decades: South Africa has only grown 1.2% on average for 30 years. He described the country as “a poster child for the middle income growth trap.” He drew links between the country’s slow growth and the shift towards a service-based economy, saying: “No economy since the industrial revolution becomes a high income economy without manufacturing.”

The employment challenge is stark, especially in light of the statistic that “for every 100 people only 56 jobs are created.” With the country at the economic growth crossroads, he recommended that the country engage in “supply-side economics of a good type,” in terms of treating households as firms with the potential to generate economic activity.

Infrastructure as economic driver

The conference underscored infrastructure's critical role in economic growth. Infrastructure was identified as "South Africa's Achilles heel" due to insufficient historical investment. "For every R1 we invest in infrastructure it enables R5 for capital formation," says Alan Winde, Premier of the Western Cape Government. Currently, the Western Cape Government infrastructure pipeline totals R119 billion.

The agricultural sector emerged as particularly significant, with "55% of SA exports" originating from this sector, making it key to national growth strategies.

As a lever, efficiencies in the building sector were relevant to the development audience. The rate of building plan approvals has increased by 8.26% in the past three years. This needs to be accelerated if the province is to meet its predicted growth levels.

Regulatory bottlenecks and red tape

A central theme focused on regulatory inefficiencies hampering development. The conference highlighted how ‘nimby’ culture obstructs development, holding up applications for years before decisions or approvals are granted. At the same time, the lack of internal collaboration creates unnecessary red tape and burdens the system. As Geraldine Liebenberg said, “Development is everyone’s business.” It is a lever for growth in cities, towns and local economies countrywide.

Geraldine is the Manager of Planning and Property Development Facilitation within the, Office of the Executive Director of Spatial Planning and Environment at the City of Cape Town. In this respect, partnerships between public, government and private stakeholders are crucial to driving a smarter, faster, more effective development process; with a view to shifting to a “yes in my back yard”, or ‘yimby’ culture.

In this respect, community is an “invisible infrastructure”, said Kirsten Wilkins, an experienced Urban Designer with over 20 years of design and city planning experience. The ability to engage positively with the community is a tool that builds capacity, supports sustainability and builds resilience. The Dunoon Potsdam sustainability case study, presented by Liezel Kruger-Fountain, Head of Urban Sustainability Unit at the City of Cape Town, was highlighted as an example of "how to get communities to be part of visible economic and sustainable development."

City Improvement Districts emerged as a successful model of public-private partnership. CIDs can focus on getting the small things right, creating local confidence for business and property owners. As Eddie Andrews noted, "CIDs are proof that good governance unlocks community trust, co-investment and shared responsibility."

Property market dynamics

The Western Cape accounts for "30% of national property value" with "more than a fifth of total housing value in Cape Town," according to Ryan Raven, the CEO of Accelerate Cape Town (ACT).

However, supply constraints persist. "Supply has been lagging behind demand," pushing up rents and prices, with applications delayed by heritage, planning and environmental regulations.

Office Sector: Hybrid work are models driving the demand for smaller, high quality flexible spaces. Decentralisation is creating opportunities outside traditional CBDs: decentralised locations are reporting 10-12% A-grade vacancies. Notably, Stellenbosch and the Garden Route are emerging as popular areas despite modest office stock.

Industrial Sector: This sector is fundamentally strong, with only 3-5% vacancies, however, leading to higher rentals. High demand and low supply is a consistent story, especially with positive business confidence – albeit that messaging about expropriation without compensation is causing concern.

Residential Sector: This market is thriving in the Western Cape, accounting for 30% of the national property value and more than a fifth of total housing value in Cape Town. In particular, key drivers are student housing, semigration, remote working, and lock-up-and-go properties in high demand.

Retail and hospitality: Tourism in the province is driving demand for service industries. This is highlighted by limited available commercial space. Notably, township spaces are now more expensive than V&A Waterfront.

Positive sectoral conditions are affected by other systemic and economic factors. The development landscape faces significant infrastructure deficits including crime, extortion, congestion, water issues, load shedding, and political uncertainty regarding land expropriation policies – all of which affect development viability. Market distortions have also emerged through unregulated Airbnbs and foreign ownership reducing the appeal of high-end neighbourhoods, compounded by long-winded eviction processes creating tenant risks.

Sustainability and future development‍

The conference emphasised sustainability as no longer optional but imperative. As Liezel Fountain-Kruger said: "Sustainability as a cornerstone of how you think about and roll out projects.” It’s not a nice to have: developers are unlikely to achieve financing or building plan approval without it.

Technology and innovation

The conference touched on technology's role in streamlining processes, with discussions about using AI to improve efficiencies in planning and development approvals. The integration of technology was seen as crucial for supporting ease of doing business initiatives.

Key insights and recommendations

The Western Cape's ability to capitalize on its growth momentum will depend on successfully addressing these systemic challenges while maintaining its competitive advantages in tourism, agriculture, and quality of life that continue to attract both businesses and residents to the region.

The province is at a critical juncture, experiencing significant growth while grappling with infrastructure deficits and regulatory inefficiencies. The emphasis on partnership between public and private sectors emerged as essential for addressing these challenges.