Top 5 suburbs where South Africans are buying homes – and only one is in the Western Cape

South Africa’s high interest rates mean buyers (especially first-time buyers) are looking for affordability, which seems to be offered in Gauteng—which is home to four of the top five suburbs with the most units sold.

South Africa’s young middle class is buying fewer houses than it did six years ago, but they’re spending more, and Gauteng remains a hotspot due to affordability and economic opportunity.

According to data from Lightstone Property, the number of property purchases by individuals aged 26 to 35 has dropped considerably over the past six years.

In 2018, this age group accounted for 92,558 property purchases, but by 2023, the number had fallen to 69,577, representing a 25% decrease.

This decline coincides with a broader decrease in overall property transfers, which dropped from 294,859 in 2018 to 255,726 in 2023, reflecting a 13% contraction in the market.

The reduction in the number of young homebuyers is noticeable in the overall market composition. In 2018, individuals aged 26 to 35 made up 31% of all property buyers, but by 2023, their share had dropped to 27%.

Similarly, those under 25 years of age saw their proportion of property purchases decline, from 11,480 transactions in 2018 to 8,977 in 2023, accounting for just 4% of total purchases in the latter year.

One of the key factors behind the diminishing participation of younger buyers is the increasing cost of living, coupled with high interest rates, which makes homeownership less attainable for many young professionals.

Despite buying fewer homes, those under 35 are spending more on the properties they do purchase.

Lightstone Property data shows that in 2023, 36% of buyers in this age group spent between R1 million and R3 million on their homes, compared to 29% in 2018.

Meanwhile, the proportion of homes priced between R250,000 and R500,000 has decreased, from 34% in 2018 to 25% in 2023, highlighting the shift toward higher-priced properties.

Gauteng, South Africa’s economic hub, remains a focal point for young middle-class homebuyers, primarily because it is affordable compared to other regions.

These trends where also noted in the Remax National Housing Report Q2 2024, adding that there has been slow improvement within the local housing market in 2024.

According to the report, the top 5 suburbs based on total units sold, as outlined by the Deeds Office:

1. Randfontein, Gauteng
2. Heidelberg, Gauteng
3. Vereeniging, Gauteng
4. Alberton, Gauteng
5. Delft, Western Cape

Surprisingly, Gauteng is home to four of the top five suburbs with the highest number of units sold.

According to the Seeff Property Group, Johannesburg and its surrounding areas offer some of the most affordable housing options in the country, making it an attractive destination for buyers seeking economic opportunities.

Seeff noted that nearly 77% of property transactions in Johannesburg this year were priced below R1.5 million, with almost half of those transactions involving properties valued at less than R700,000.

Only a small fraction, around 4.82%, of transactions were for properties priced at R3 million or above.

The Western Cape, South Africa’s third most populated province, presents an interesting contrast to Gauteng.

Although the Western Cape, particularly areas like Delft, also sees significant property activity, it is generally less affordable compared to Gauteng, largely due to higher property prices.

This makes the Western Cape less appealing to first-time buyers despite its attractive lifestyle offerings.

However, the province remains a sought-after destination for those who can afford it, particularly among those looking for more scenic and lifestyle-oriented locations.

The local property market has shown signs of improvement in 2024, with some optimism for the remainder of the year.

According to the Remax National Housing Report for Q2 2024, the market is experiencing a slow but steady recovery.

Samuel Seeff, chairman of the Seeff Property Group, expects buyer demand to increase following the recent 25 basis point cut in interest rates, with another cut anticipated in November.

This reduction in rates, coupled with flat property prices, could stimulate more activity in the market.

John Herbst, CEO of Fine & Country Sub-Sahara Africa, echoed this sentiment, noting that lower interest rates could lead to a surge in market activity and potentially boost property values.

As interest rates continue to drop, the property market may see renewed energy, offering opportunities for both buyers and investors.

The coming months will reveal how these trends unfold, particularly in inland metros where affordability remains a significant driver.

For now, Gauteng remains a hotspot for buyers, while the Western Cape attracts those seeking lifestyle over price.

Read: The average price of a home in South Africa – and what you can get in Cape Town, Joburg, and more