Data analytics group Lightstone has published its latest data on South Africa’s property market, including the current state of the country’s housing market and the cost of buying a home.
The data shows that national annual house price inflation was recorded at 5.03%, marginally down from the five-year record high recorded in May and June.
“Inflation has been rallying up across all nine provinces except for Limpopo, which has experienced a slight drop-off from last month,” the group said.
“Inflation in the low-value segment continues to outgrow that of its higher value counterparts, with prices currently growing at 11.2%, more than four percentage points ahead of the mid-value segment (6.4%).”
Among the country’s major municipalities, the data shows that coastal municipalities perform better than inland municipalities. This can be partly attributed to an ongoing trend towards semigration, with a growing number of people from Gauteng looking to move to the coast.
“The Covid pandemic has boosted demand from buyers looking to swap the confines of their urban houses for a coastal lifestyle,” said the Seeff Property Group.
The property group said that the excellent amenities, accessibility, and proximity to Durban are a big drawcard attracting buyers from Gauteng and buyers moving out of Durban down to the South and North Coast.
This was echoed by Pam Golding Properties, which said that similar trends have seen more people move to the Western Cape.
Lightstone’s data shows that freehold properties are currently outpacing sectional-title properties, which are below the annual inflation level.
In times of lower average prices in the sectional title residential property market, sales volumes traditionally soared upwards.
Our proprietary market strength indicators show that demand is now moderating, following a strong rebound in the second half of 20220 and into 2021, FNB said in its latest property barometer.
“However, these are still above 2019 levels, reflecting the positive effect of lower interest rates on market activity and the changing housing needs due to the pandemic – greater adoption of working from home and homeschooling,” it said.
The bank added that mortgage extension continues to grow faster, while loan-to-price ratios are trending lower.
“Our investigations show that much of this credit is funding purchases in the middle- to upper-priced segments. As such, mortgage loan sizes have become bigger, reflecting a shift towards higher price brackets,” it said.