This province is seeing the biggest increase in house prices in South Africa

 ·13 Aug 2023

Mpumalanga, often seen as simply a tourist hotspot, has recently seen the highest increase in property prices.

According to Stats SA, the overall residential property price index dropped from 3.8% year-on-year in February 2023 to 3.6% in March 2023 year-on-year. It did, however, increase by 0.2% month-on-month.

Although the Western Cape is often cited as the area with the highest rising prices, Mpumalanga actually recorded the highest increase in the index at 17.3% – far above the Western Cape’s 5.7%.

Limpopo saw the second highest year-on-year increase, jumping 7.4% in March 2023 – far below Mpumalanga’s 17.3%.

Gauteng, South Africa’s most populous province, only saw an increase of 1.9%.

However, the Western Cape was still the main contributor to the 3.6% annual inflation.

The Western Cape’s 5.7% year-on-year increase contributed 1.8 percentage points, whilst Gauteng’s 1.9% contributed 0.8 of a percentage point.

Mpumalanga did, however, contribute 0.4 percentage points to the overall 3.6% annual inflation – the third highest overall.

Mpumalanga boom

Rhys Dyer, the CEO of Ooba, previously noted that three policies had seen a steady increase in property demand – the Free State, Limpopo and, crucially, Mpumalanga.

Dyer said that these provinces are at the fore of the first-time homebuyer market due to their affordability, value for money, and alignment with the trend of young homeowners coming back to their hometowns to start families.

Despite often only being considered a tourism hotspot, Dyer said that Mpumalanga has presented an excellent investment opportunity due to the increased demand for investment and rental properties.

He said that Mbombela is attracting first-time homebuyers, especially in new developments like Matumi Valley, Green Valley Estate and Intaba Estate.

The average purchase price of first-time homes also jumped 8.7% from R955,000 in Q1 of 2022 to R1.038 million in Q1 of 2023.

He noted that the close-knit estate living communities have been crucial for the region’s growth.

“Estates already account for nearly 40% of total housing stock in Mbombela, once again underpinning the need for security, a sense of community, amenities and a ‘lock up and go’ lifestyle,” he said.

803 freehold homes were sold in 2021 – a record high – with another 741 sold in 2022.

“Over the past 12 months, 116 new plots were sold – 107 of which were located in estates.”

Investment and rental percentage applications can be seen below, with Mpumalanga leading the way for large stretches:

Read: New R200 million shopping mall opening soon in South Africa

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