The only province in South Africa where homeowners are winning big in 2024

While house prices have increased in several provinces in the second quarter of 2024, the Western Cape is the only one to see growth in the price of residential property when adjusted for inflation.

This is according to the Q2 2024 Oobarometer report published by Ooba Home Loans, which highlighted the latest trends experienced by South Africa’s property market in 2024.

According to the report, both the national and first-time homebuyer purchase prices have shown marginal nominal price growth year-on-year at 2.3% and 2.7%, respectively.

Despite the growth, real property price growth remains negative due to still elevated inflation.

CEO of Ooba Group, Rhys Dyer, noted that when compared to the last quarter, both the national and first-time homebuyers’ average purchase price has, in fact, dipped.

The national average purchase price, now at R1,458,924, has dropped by 1.4% in the last quarter, while the average purchase price for first-time homebuyers is down by 1.8% in the last quarter—now at R1,150,238.

“This result could be due to potential homebuyers making more conservative purchases pre-elections and pre-interest rate cuts,” he said.

Regions recording a year-on-year nominal increase in the average purchase price include Limpopo, Free State, and the Eastern Cape, while Mpumalanga—most notably—a strong contender in the past—has slipped into negative territory.

However, Dyer highlighted that the Western Cape registered the strongest growth in Q2 ‘24 across both the first-time and repeat-homebuyer categories.

Property prices in these two categories recorded 7.8% and 6.3% nominal increases, respectively, and are the only regions to record real (inflation-adjusted) increases in property prices.

The latest CPI inflation data shows the current inflation rate is 5.1%.

On the other end of the spectrum, KwaZulu Natal saw the largest decline in both first-time and repeat homebuyer house prices, recording -6.3% and -7.2%, respectively.

Johannesburg and the West Rand are not far behind, recording a decline of -2.6% compared to last year.

Many experts point to service delivery and investment as the reasons why the Western Cape is the only one proving to see real price growth in its property market.

The annual Africa Wealth Report by Henley & Partners predicts that the number of millionaires in Cape Town will almost double over the next decade, while Johannesburg’s millionaire population is expected to decrease.

Smaller towns in the Western Cape, particularly in the Cape Winelands area, are projected to see a rise in the number of millionaires in the coming years.

Over the past ten years, the Winelands region has experienced a 28% increase in its millionaire population, and this trend is expected to continue into the 2030s.

Additionally, the millionaire population in the Garden Route and the Whale Coast grew by 32% and 35%, respectively, during the previous decade.

The Garden Route and the Whale Coast stretch from Mossel Bay to Storms River in South Africa and include notable towns such as Plettenberg Bay, Knysna, and Wilderness.

This trend is also reflected in the country’s property market, with Cape Town and other smaller towns in the Western Cape experiencing a significant boom.

The report suggests that one reason for this trend is the emigration of wealthy individuals from Johannesburg due to declining quality of service delivery in the city.

The wealth report revealed that millionaires prioritise personal safety, basic service delivery, and political stability when deciding where to live.

Similarly, property strategist John Loos’ analysis for FNB’s 2024 property insights emphasizes the importance of municipal and utility service reliability for commercial property.

The report also points out that rising municipal rates and utility tariffs are impacting net property income.

Although improvements in electricity supply are predicted, people are expected to continue relocating to areas with better services, leading to population shifts for residential and business activities.

Read: Two new property investment hotspots emerging in South Africa