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The average house price in South Africa: 2013 vs 2017

The average house price in South Africa: 2013 vs 2017

Research conducted by FNB shows how the average house price in South Africa has climbed over the past five years across three size categories: large, medium, and small.

Household and property sector strategist at FNB Home Loans, John Loos, noted that early-2017 has seen the continuation of a long term trend in terms of smaller sized home price inflation out-pacing that of medium and larger sized homes.

However, the medium-sized category of homes no longer outperforms the large-size category in terms of price growth, FNB said.

FNB’s size categories are as follows:

  • Small-sized homes – 20-80 square metres
  • Medium-sized homes – 80-230 square metres
  • Large-sized homes – 230-800 square metres

In the first quarter of 2017, the house price inflation rates for two of the three categories, i.e. those of the small and medium-sized categories, slowed, Loos said.

The small-sized segment price inflation was the highest of the three segments, at 6.1% year-on-year in the first quarter of 2017. However, growth slowed from 6.6% in the previous quarter, and 9.6% in the first quarter of 2016.

The Medium-sized segment’s rate slowed to 2.9% year-on-year in the first quarter of 2017, from 3.8% in the previous quarter. At the same time, the large-sized home category saw a mild house price growth acceleration from 3.2% year-on-year in the previous quarter to 4.1% in the first quarter of 2017.

“The current economic environment remains weak, though not in recession, causing weak household income growth, and interest rates have risen mildly in recent years. Effective personal tax rates continue to rise, while municipal rates and tariff increases outpace general inflation,” said Loos.

“And, of course, there is the “sliding scale” for transfer duties, putting more expensive homes, which are on average larger, into higher transfer duty brackets. In addition, security concerns often drive demand for smaller homes in “secure” clusters,” he said.

The small-sized FNB House Price Index has inflated by 395% since the first quarter of 2001. The medium-sized Index is not too far behind with 374.2% cumulative inflation over the same period.

But the large-sized Segment has underperformed by a significant margin, especially since around 2011, cumulatively inflating by a significantly lesser 281.3% since early-2001, FNB said.

“At some point, such underperformance in price growth leads to these homes becoming relatively attractive to a growing group of people as many medium-sized home values catch up with the larger-sized home values,” Loos said.

“We do, however, remain of the view that smaller-sized homes are the future for many households, and that this size category will for a far greater portion of overall housing stock in years to come,” he said.

Average house price in South Africa by size category

Price by size 2013 2014 2015 2016 Q1/2017
Large home
R1.73m R1.81m R1.88m R1.93m R1.98m
year-on-year 4.7% 4.5% 3.7% 2.5% 4.1%
Medium R923,602 R986,092 R1.05m R1.10m R1.12m
year-on-year 4.1% 6.8% 6.4% 5.1% 2.9%
Small home R478,203 R522,070 R565,697 R612,332 R635,452
year-on-year 7.4% 9.2% 8.4% 8.2% 6.1%

 


Read: More SA properties are being sold for less than their previous purchase price


BusinessTech's Staff Writer is directly plugged into the South African Internet backbone, and spits out press releases and other news as they receive it. They are believed to be cl...
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  • OWL

    “Houseprices” imply buying and selling…don’t people just get homes for free?

    • Eish, sorry Bwana,, for the ah,,,ah,,, ANC supporters??

    • Blapartheid Zulu

      Apparently all the houses and lands were “stolen”, its weird because how can it be stolen if you never had it? Its like saying you stole my 2020 BMW before I could buy it in 2025 while I am still in 2017? african logic?

      • OWL

        The only place on the planet where babies were born with title deeds, BZ!

  • Sooo, what happens to those homes price between 1.12 & 1.73 million,, just asking?

    • John Deer

      They stay UNSOLD.!!!!!

    • Cynic Scepticism

      Do you need somebody to come over to your house and explain averages to you?

  • Shane Barker

    housing way to expensive , my old place went up R 500 000.00 – in 4 years ,

  • Philman

    I think we can expect prices to drop this year. Junk status = increased interest rates = lower prices.

  • Ace of Spades

    Where is this SA? must be all the Crap ANC controlled areas!

    • Blapartheid Zulu

      nope, probably in sandton and cape town etc, DA or “white monopoly capitalist” controlled areas. ANC controlled areas are still struggling with basic utility needs

  • bengine

    Research conducted by FNB shows how the average house price in South
    Africa has climbed over the past five years across three size
    categories: large, medium, and small

    I dispute this – where do they come with nonsense like this – who ever heard of house prices increasing …..

    • Blapartheid Zulu

      Im battling to sell my house the SAME price I bought it 4 years ago LOL. I wished it went up 6-8% year on year haha! Maybe in sandton, but my african monopoly capitalist company is not paying me enough to afford one! So much for all these “claimed’ privileges.

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