{"id":746734,"date":"2024-02-03T17:00:00","date_gmt":"2024-02-03T15:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=746734"},"modified":"2024-02-02T14:45:38","modified_gmt":"2024-02-02T12:45:38","slug":"what-the-average-house-price-in-south-africa-gets-you-in-joburg-durban-and-cape-town","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/property\/746734\/what-the-average-house-price-in-south-africa-gets-you-in-joburg-durban-and-cape-town\/","title":{"rendered":"What the average house price in South Africa gets you in Joburg, Durban and Cape Town"},"content":{"rendered":"\n

Despite declining nominal property price growth, there are still several silver linings for South Africa’s property market.<\/p>\n\n\n\n

According to ooba Home Loans, the average national property price in Q4 2023 started at R1,411,434 – down by 0.8% and 0.9% from Q4 2022 and Q3 2023, respectively.<\/p>\n\n\n\n

The average approved bond size did, however, increase by 1.2% from Q3 2023 to R1,301,395 in Q4 2023. <\/p>\n\n\n\n

The average deposit as a percentage of the purchase price dropped by 9.3% year-on-year, with it now at R110,039 or 7.8% of the average purchase price. First-time homebuyers, on the other hand, increased their deposit as a percentage of the purchase price by 6.4% on the last quarter and up 23.7% from Q4 \u201822.<\/p>\n\n\n\n

\u201cThis shows that first-time homebuyers continue to prioritise deposits and understand the importance of savings \u2013 regardless of the climate. This statistic cannot be underestimated as it sets the tone for a potential surge in first-time homebuyers once interest rate cuts commence,” Rhys Dyer, CEO of ooba Group, said. <\/p>\n\n\n\n

Other positives for the market include the increase in buy-to-let properties and the willingness of banks to offer competitive home loan deals. <\/p>\n\n\n\n

Dyer noted that the average interest rate offered by banks is now at -0.48% below prime (4 basis points lower than in Q3 2023), which sends a good signal to the market: <\/p>\n\n\n\n

\u201cIt indicates confidence by the banks and an ongoing appetite to compete for home loan market share. Here, the banks are looking to attract new-to-bank customers with additional rate concessions, and we expect this strategy to prevail throughout 2024.\u201d<\/p>\n\n\n\n

Although some of the key indicators did decline in Q4 2024, this was to be expected. <\/p>\n\n\n\n

\u201cThe statistics are representative of the end of a tough two years, largely defined by interest rate hikes, increased inflation, and the rising cost of living. They paint a realistic picture of the effects of a high interest rate environment on the average homebuyer,\u201d<\/p>\n\n\n\n

\u201cHowever, what is good to see is that, despite national property prices coming under pressure as a symptom of the lower demand for property, South Africans\u2019 nominal salaries are growing at a faster rate than property prices, boosting would-be homebuyers\u2019 ability to enter the property market.\u201d<\/p>\n\n\n

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The slight drop in bank approval rate from 84.4% in Q4 2022 to 81.6% in Q4 2023 highlights the financial stress and affordability challenges that the average homebuyer is under amid current high interest rates. <\/p>\n\n\n\n

\u201cHowever, what is encouraging to see is that bank approval rates have only dropped by just under 2% from the 83.5% that ooba Home Loans was securing for our homebuyers at the start of the rate hike cycle in Q4 2021,\u201d says Dyer.<\/p>\n\n\n

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With banks still giving loans, BusinessTech has looked at what the average price of a property in South Africa can buy in the nation’s three biggest cities – Johannesburg, Cape Town and Durban: <\/p>\n\n\n\n

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