The one way Joburg property beats other major cities in South Africa

 ·15 Jun 2024

Johannesburg is the most affordable metro in the country whether you want to buy or rent, according to agents from the Seeff Property Group.

Lightstone data shows that the average transaction price for the metro is around R1.2 million. This is below the national average of R1.3 million.

Comparatively, the national average for Pretoria/Tshwane is slightly above this, and stands at R1.4 million for Durban/eThekwini based on data for this year.

Greater Johannesburg continues to see the largest influx of people migrating to the big cities in search of economic opportunities, and they are still finding good value.

Affordability is a big feature of the Johannesburg property market. The data shows that almost 77% of this year’s transactions have been below the R1.5 million price mark, with almost half (47%) of these below R700,000.

Only 4.82% of transactions are valued at R3 million and over. According to the data, the average price for first-time buyer homes is around R700,000 to R800,000, while the average price for luxury homes is R4 million.

Rochelle Holland, manager for Seeff Johannesburg North-West, said that while buyers in the mid- to lower price categories are more sensitive to interest rate hikes, the upper-end market in estates have seen excellent sales of luxury homes selling for upwards of R6 million.

She said it also helps that sellers are now more receptive to offers which reflects a shift in acceptance that the market is still more favourable for buyers.

In addition the city is seeing a good mix of buyers, including investors and cash buyers who are not reliant on mortgages, the group said.

Turn is coming

A positive development for property owners or those looking to become property owners is coming, with sentiment around interest rate cuts turning positive.

While the prospect of the interest rate cycle turning has been pushed back to the end of the year, the cloud of uncertainty about when the cuts are coming is clearing up.

According to economists at Nedbank, the South African Reserve Bank (SARB) is likely to start cutting rates as early as September 2024, with a 25 basis point cut pencilled in. This should be followed by another 25 bp cut in November.

More cautions projections put the first cut in November – but certainty is building for the first cut to at least be in 2024.

Homeowners and prospective homeowners have been cautioned to expect a longer and slower cutting cycle, with further cuts to follow in small bites throughout 2025.

Read: Massive property rate hikes in South Africa – Cape Town vs Joburg vs Durban

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