‘Reverse emigration’ hitting Joburg
The Gauteng property market’s recovery has been robust, and many South African expats are looking to return home.
Although the improvement in the Gauteng market seen at the start of 2024 was primarily seen in an increase in enquiries, real pen-to-paper progress started after the elections, with the post-election recovery already expected by July 2024.
“Driven by a generally positive sentiment regarding the expected market and political improvements in South Africa in an election year, the increased market activity we saw earlier in the year wasn’t unexpected,” said Cobus Odendaal, CEO of Lew Geffen Sotheby’s International Realty in Johannesburg and Randburg.
“However, the market’s resurgence post-election has been more dynamic than anticipated. In July, the turnover at our Randburg office tripled what it had been in previous months, and in Craighall, the monthly turnover doubled.
“This not only signals renewed confidence among buyers and investors in Johannesburg, but also reflects the first solid signs of restored confidence in the local market by local buyers, with Johannesburg naturally leading this revival.”
Odendall said they started to see that many of the people who sold their properties in the last two years to liquidate their assets are now returning to the market to purchase, with a surprising few being cash buyers.
“Homeowners who sold their properties and chose to rent before making any final decisions are now returning to the market,” said Odendaal.
“These funds can be used to purchase property again, which signals a renewed confidence in the South African economy and a desire to invest in long-term assets.”
“Having said that, we are still experiencing healthy activity in the more affordable rental market with demand still high for homes priced between R8,000 and R35,000 per month, but demand has declined noticeably for properties priced higher, and it seems to be limited to specific areas and corporate rentals.”
He added that there has been a spike in enquiries from people who sold up to move abroad and foreign buyers.
“We’ve started to receive enquiries from expats looking to move back and buy property again, which is very encouraging.”
This is not the first time a property expert has highlighted the return of South African expats.
In late 2023, Rory O’Hagan, principal of the Chas Everitt Hyde Park and Sandton office, said that expats are returning in droves to Gauteng, with many being drawn to the northern suburbs of Johannesburg due to their proximity to Sandton.
Other trends
“We’re also fielding more enquiries from foreign nationals, although this interest is largely centred around return business with existing clients and specific referrals, rather than new entrants into the market, demonstrating the importance of established relationships and trusted networks,” said Odendaal.
Although large amounts of renewed activity are happening around the R2 million mark, secure sectional title properties in areas like Hyde Park and surrounds are especially popular.
However, Odendaal said there was also movement at the higher end of the market as people were willing to invest far more in South Africa, which he believes is a positive sign for the future.
“That said, we need to bear in mind that the top end is a relative concept, and I’m not only referring only to homes in the R20 million plus band, which are slowly and tentatively attracting more enquiries; I’m talking about the higher priced properties in each area where there has been a definite increase in demand.”
I suspect that enquiries for trophy homes will translate to wet ink offers during the next quarter or two.”
Another sign of renewed market activity is a revival in the development sector, which is currently underway.
“We’re already seeing increased activity from prominent investors focusing on smaller, exclusive developments and larger multi-unit projects,” said Odendaal.
“The latter, particularly one, two and three-bedroom units, are concentrated near shopping centres and business hubs, reflecting a strategic approach to meet the revived market demand.”
Although the Johannebsurg market has seen an improvement in market activity since the election, Odendaal said that the Johannesburg market is set to swing into a buyer’s market.
“If the repo rate comes down, which is widely expected, this shift could accelerate, giving buyers even more leverage.
“Over the next 12 months, I anticipate increased activity across the Highveld market, with continued restoration of confidence among buyers and investors.
“This positive momentum, fuelled by a stabilised political environment and potential interest rate adjustments, should lead to more transactions and development projects.”
“And with business confidence also well on the way to recover, the Johannesburg market, in particular, is poised for sustained growth as both local and international interest will remain strong.”
Read: What interest rate cuts in South Africa will mean for the rand
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