Rhys Dyer, CEO of ooba Group, says there are several emerging trends, often overlooked, that are poised to have an impact on South Africa's property landscape in 2024.

Gradual Rise in Average House Prices:

After reaching a peak in 2020 and 2021 due to low interest rates and increased property-price growth, the average house prices in South Africa have stabilised over the past two years, coinciding with interest-rate hikes since the pandemic.

However, recent data from ooba Home Loans indicates a resurgence, with record-high purchase prices observed in January 2024, particularly in the Western Cape and Eastern Cape regions.

“The overall purchase price paid rose to an all-time high of R1.49 million in January 2024 (+7.6% above year-earlier levels), while the average price paid by first-time buyers rose by a more modest +4.1% year-on-year, reaching a new high of R1.18 million.

“Perhaps the most confident statistic to come out of this would have to be the Western Cape where the average purchase price breached a whopping R2 million for the first time," said Dyer.

Surging Demand for Holiday Homes in the Eastern Cape:

The Eastern Cape has witnessed a surge in demand for holiday homes, surpassing the Western Cape since 2020.

This trend is attributed to increased foreign buyers in the Western Cape, leading locals to seek coastal properties elsewhere, particularly in the Eastern Cape, where prices are more affordable.

Free State Attracts First-Time Buyers:

The Free State has emerged as an attractive destination for first-time homebuyers, with average purchase prices below R1 million.

This affordability has led to a significant percentage of first-time homebuyer applications in the region, with first-time home buyers accounting for 62.9% of all house loan applications in the Free State in January 2024, surpassing other areas like the Western Cape (35.8%).

Strong Property Market in Limpopo:

Limpopo and Mpumalanga have seen substantial year-on-year increases in average first-time homebuyer purchase prices, positioning them as contenders in the property market.

Limpopo, in particular, has shown robust property price performance, exceeding regional averages in recent months.

Growth in Buy-to-Let Properties:

Despite subdued investor sentiment in South Africa, there is growing demand for investment properties, particularly in regions like the Western Cape, Eastern Cape, and Free State. Factors such as low house prices and opportunities in student housing contribute to this trend.

“One of the key drivers of the boom is undoubtedly the Western Cape, and I would go as far as to predict that in 2024 in excess of 30% of our home-loan applications from this region will be from investors.”

However, Dyer added that there are signs of increased investment demand elsewhere such as the Eastern Cape and Free State.

“This could be attributed to a young, growing population taking advantage of low house prices and student housing presenting a good investment opportunity."