Capital comparisons - cape town v wellington
We take a look at the capital cities of two major rugby nations in the Southern hemisphere, South Africa and New Zealand. We assess which one to pass on and which one to grab with both hands... or are they both worth a try?
Cape Town
Cape Town is the legislative capital of South Africa, where the National Parliament and many government offices are located.
Often regarded as one of the world's most beautiful cities, it is famous for its natural features, most notably Table Mountain and Cape Point, which attract countless tourists each year.
Riding on the back of an empowered middle class, house prices had been growing strongly since 2000. Offshore investments, after Apartheid, were re-invested mainly into property, while the emergence of historically low interest rates and an increase in disposable income has given the property market a much needed boost.
But now, after remarkable price increases between 2000 and 2007, South Africa's property price boom has stalled in the first quarter of 2008.
Although the country's house price index rose 6.8% to the end of April 2008 from a year earlier, it actually fell 3.84% when adjusted for inflation, according to figures from ABSA, South Africa's leading mortgage provider.
Global Property Guide report that apartments in Cape Town have relatively low rental yields at an average of 4.57%. The smaller flats, such as studio apartments, currently perform better and generate higher yields.
Apartment prices in Cape Town are much higher than rival city Johannesburg, starting at £73,119 for studio apartments, whereas a three-bedroom apartment in Cape Town costs just under £322,303.
Conclusion: A place where foreigners can buy real estate and - unlike in neighbouring countries - this also includes farms and agricultural land. The buying process is incredibly well regulated and easy to follow and although the market has hesitated recently, Cape Town still has potential for property investment.
Wellington
Wellington is New Zealand's second largest urban area and the most populous national capital in Oceania. It's also the country's political Centre, housing Parliament and the head offices of all government ministries and departments.
Wellington has been described as a heaven on earth, boasting numerous grand parks and gardens including rose gardens, begonia houses, memorial parks, observatories and playgrounds.
New Zealand is proving an attractive emerging market for some British buyers, not least because of the tax regime: there is no stamp duty, land tax, property purchase tax or capital gains tax.
The country had experienced eight years of unbroken economic growth, helped by a strong labour market and low unemployment, but last year New Zealand's housing market slowed significantly, and the long-expected correction now seems to be underway.
The total value of houses sold was NZ$2.11 billion (£7.9 million) in March 2008, down 53.42% down on the transactions recorded in the effervescent market of two years earlier (NZ$4.53 billion - £1.7 billion).
Apartments in Wellington can return really excellent yields, according to Global Property Guide research. Luxury three-bedroom apartments yield around 7.5%, while studios are around 10%. Wellington houses can also produce very good rental returns, at 10.2% for the larger property.
Conclusion: With property price increases that have baffled the experts, a strong national economy and political system and some of Mother Nature's finest, Wellington has too much going for it to be overlooked.
Verdict
Difficult to separate them on the rugby field and the same applies here. They both have had a boom property period recently, which is now beginning to cool off, but both cities deserve to be considered, especially if the global market begins to pick up again.
Search for property in South Africa and New Zealand
Property for sale in Cape Town
Property for sale in Wellington
Photo by Biology Big Brother