Properties in these provinces are outpacing all the rest

Property inflation in certain provinces has outpaced others, according to recent data from property analytics group Lightstone.

The company’s latest residential property indices reported that annual property inflation is currently at 3.77%, a slight increase from last month.

Monthly national property inflation is 0.42%.

Lightstone said annual property inflation remained steady in the Free State, increased in KwaZulu-Natal, Limpopo, Mpumalanga and the Western Cape, and decreased in the Eastern Cape, Gauteng, North West and the Northern Cape.

Regarding valuation segments, Lightstone said that the Low-Value segment was once again much higher than in other segments.

Inflation in the Low-Value segment was 8.5% compared to 4.3% for properties in mid-value segments.

High-value property owners are facing an increased inflation rate of 3.7%. The luxury segment recorded the lowest metric at 3.0%.

The company’s segments were based on the following property values:

• Luxury: More than R1.5 million
• High Value: Between R700,0000 to R1.5 million
• Mid Value: Between R250,000 to R700,000
• Low Value: Less than R250,000

Low-value properties have experienced the highest inflation rate since 2019, peaking at 12.5% in 2021.

When analyzing and reporting property data, Lightstone uses repeat sales indices. Lightstone said this method is unlike “average house price” indices, repeat sales indices offer a more accurate measure of the real price inflation for houses that have been sold multiple times within a specific timeframe.

This approach provides a clearer understanding of how property prices have changed over time by focusing on individual transactions rather than relying on average values.

Below are a selection of graphs illustrating the change in property inflation across different value segments:

Inflation also fluctuates across different provinces. Lightstone reported that Limpopo has the highest inflation status at 7.18%, followed by Mpumalanga at 7.15% and the Western Cape in third at 6.28%.

The map below breakdown the current provincial property inflation status in South Africa:

When taking into account the difference in property inflation across municipalities. Lighstone reported that Nelson Mandela Bay saw the highest property inflation rate at 3.9%. The area’s property inflation peaked in the first half of 2022 at 6.9%.

Provided below is a breakdown of municipal property inflation:

• City of Cape Town: 3.6%
• City of Johannesburg: 0.1%
• City of Tshwane: 2.7%
• Ekurhuleni: 1.9%
• Ethekwini: 3.3%
• Nelson Mandela Bay: 3.9%

Read: The value of a 2010 property today – total return in Cape Town vs Johannesburg vs Durban