Property boom in South Africa’s ‘engine room’

 ·26 Aug 2023

Although South Africa’s property market has experienced several issues, property sales in Johannesburg have continued to grow over the last six months.

“Johannesburg is clearly still the engine room of the SA economy, and home to most of the country’s top business leaders, industrialists and entrepreneurs as well as an increasing number of affluent foreign investors. Ambitious young people from smaller towns and less developed regions also continue to move here in search of employment and a better lifestyle,” Chas Everitt International’s Rory O’Hagan said.

“And as a result, our office has been achieving more than R100 million worth of registered sales per month in the northern suburbs since January.”

“It is also significant that only a handful of those sales fell into the luxury and super-luxury categories, and that by far the majority took place in the R2 million to R5 million price bracket, as this indicates broad spectrum demand. A recently-concluded R71 million sale is not included in these figures either.”

He added that there is still strong interest among buyers returning to Johannesburg after moving to less-populated areas across the country during the pandemic – a reverse semigration trend of sort.

The largest driver of sales, however, has been the desire for homeowners to sell their large properties and downsize, which is in response to the growing municipal property rates and the increasing costs of utilities, security and maintenance.

However, according to O’Hagan, the market is still offering great chances for individuals and companies to purchase larger houses to cater for growing families, home businesses, and foreign workers with short-term contracts.

“Sellers in these areas are now pricing much more realistically and are much more willing to negotiate, which creates room for excellent capital growth once interest rates drop. The banks are also still keen to approve new home loans, although many buyers in this sector are purchasing with cash.

“Meanwhile, increased personal safety and security remains a priority for many buyers, and this is driving sales in well-known lifestyle estates such as Dainfern, Blair Athol and Waterfall.”

The rental market is also booming as many have delayed their purchase until interest rates start to stabilise, which has increased the number of buy-to-let investors.

Properties in Johannesburg at various price points can be found below:

  • 5 Bedroom Apartment in Houghton, Johannesburg North
  • Price: R50,000,000

  • 4 Bedroom House in Westcliff, Johannesburg North
  • Price: R11,500,000

  • 3 Bedroom House for Sale in Melrose, Johannesburg North
  • Price: R3,800,000

Read: This is how you can shave years off your bond – and save close to R1 million

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