Big turn for property prices in South Africa – with bad news for owners in one city

South Africa’s residential property prices continued to climb in April 2024, marking the eighth consecutive month of gains since the flat growth between May and August 2023.

However, property prices in the City of Johannesburg remain under strain.

Annual national residential property price inflation was 3.9% in April 2024, an increase from 3.0% in March 2024. The residential property price index (RPPI) increased by 0.4% month-on-month in April 2024.

Property owners in South Africa will welcome the news after the low, marginal growth experienced for much of 2023, and represents a significant turn from the dip in 2022/23.

While the national picture shows a big swing, it is not all good news across every region.

Looking specifically at the major metros, property price growth of 2.6% was recorded nationally, but this was heavily swayed by 10.6% growth in Buffalo City and 5.9% growth in Cape Town.

Cape Town has the biggest contribution to the index, accounting for 2.0 percentage points of the inflation rate (compared to Buffalo City’s 0.2 percentage point contribution).

One metro that stands out, however, is the City of Joburg, which was the only metro to record a decline in pricing, with inflation sitting at -0.7%, contributing -0.1 percentage points to the overall rate.

Types of properties

The picture is also different when looking at the different property types.

Properties sold for the very first time saw exceptional price growth in Manguang at 13.9%. However, for the rest of the metros, price inflation ranged between 2.3% and 3.5%.

On the low-end on the spectrum, first-time sellers saw only 0.2% price growth in eThekwini, and negative growth in Buffalo City (-3.7%) and Nelson Mandela Bay (-2.1%).

The index for resold properties, however, were positive across the board – except for the City of Johannesburg yet again, where pricing was down 1.8%.

Cape Town and Buffalo City were again the biggest gainers here at 5.3% and 4.1%, respectively.

Looking at pricing of sectional titles versus freehold properties, price growth was largely positive in the former, but NMB, Manguang, Ekuhuleni and Joburg all saw declines year-on-year.

Freehold pricing was positive, except for eThekwini, which saw a decline of 3.2%.

Read: What to expect from interest rates in South Africa next week