Data from ooba Home Loans highlights promising recovery trends in Gauteng's residential property market, with Tshwane seeing improvements in key areas such as average purchase price, first-time homebuyer demand, and the investment property segment.
In August 2024, ooba Home Loans’ pinned the average property purchase price in the Western Cape at R1.94 million – a price point that many prospective owners simply cannot afford, said Gavin Lomberg, CEO of ooba Home Loans.
Ooba's data showed that the average house price in South Africa is R1,458,924.
“One could speculate that those currently renting through the 'higher for longer' interest rate environment, may now feel compelled to take advantage of the recent interest rate cut – likely the first of many – and will opt for areas (and regions) where they can get the most value for money.”
While demand for homes in the Western Cape remains strong, Lomberg said that Gauteng continues to be the country’s economic hub, attracting a significant portion of the working population, especially young professionals and future first-time homebuyers.
Gauteng remains the largest housing market in South Africa, with 34.7% of the nation's 7.1 million homes and 37.3% of the R7 trillion total property value.
The affordability of Gauteng properties is a key factor. “According to Lightstone, 41.4% of home loan applications currently received are for homes valued at R800,000 and below, while 29.8% are within the R800,000 to R1.5 million range,” Lomberg said.
“Given that the average purchase price paid by first-time homebuyers nationally was R1.15 million in Q2 2024, Gauteng’s housing market represents an attractive proposition for potential homebuyers.”
In Gauteng South and East, the average purchase price saw a 7.6% increase from December 2023 to August 2024, reaching R1.16 million in August.
“The average price paid in Tshwane has also strengthened from a low of R1.41 million in December 2023 to a high of R1.60 million in August 2024 – a healthy increase of 13.4%.”
Meanwhile, Johannesburg has experienced a more modest rise, with prices reaching R1.44 million in August 2024, up from a low of R1.33 million in March 2024.
“This is encouraging to see as it paints a picture of resilience and we have no doubt that as rates decrease, more homebuyers will come to the fore,” Lomberg said.
He further noted that first-time homebuyers, who were crucial during the housing boom, have been affected by rising interest rates and economic challenges.
“Yet demand from first-time homebuyers across Tshwane and Gauteng South and East is extremely encouraging to see, and we expect these figures to rise as interest rates drop.”
Lomberg anticipates that Tshwane will be the first major metro in Gauteng to record a positive inflation-adjusted increase in first-time homebuyer house prices, depending on whether prices continue to recover and inflation softens as projected.
A notable trend in the market has been the growing demand for investment properties.
“While the Western Cape has been a primary focus for investment homebuyers, demand across Gauteng’s three major metro housing markets is currently elevated compared to pre-pandemic levels,” Lomberg said.
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